Frasers Commercial Trust delivers record distributable income

Construction works for the development of a 16-storey hotel and commercial project at China Square Central (left) are expected to be completed by mid-2019. The hotel is being developed by an entity of Frasers Centrepoint.
Construction works for the development of a 16-storey hotel and commercial project at China Square Central (left) are expected to be completed by mid-2019. The hotel is being developed by an entity of Frasers Centrepoint.ST FILE PHOTO

Frasers Commercial Trust (FCOT) has notched up record full-year distributable income, although fourth-quarter distribution per unit (DPU) fell 2.8 per cent to 2.45 cents from 2.52 cents a year earlier.

The slide in DPU came despite a 3.5 per cent rise in distribution income for the quarter ended Sept 30 to $19.49 million. The reason was that the management took its management fees in cash instead of units, whereas in the same period last year, 30 per cent of the fees were taken in units, FCOT said.

However, the trust manager added that it has delivered the highest distributable income and DPU to unit holders for the financial year since the trust was listed in 2006.

Distribution income to unit holders for the full year rose 14.5 per cent to $77.6 million, while the DPU for the full year was up 1.1 per cent at 9.82 cents. Net property income for the quarter jumped 6.9 per cent to $29.3 million, while gross revenue went up 5.7 per cent to $39.3 million.

Mr Low Chee Wah, chief executive officer of the manager, said: "We are pleased that the trust continues to achieve new highs, and this is particularly commendable given the weaker global economy and challenging Singapore office leasing environment."

He added that the full-year distributable income and DPU marked the seventh straight year of growth since the completion of a recapitalisation exercise in 2009.

  • AT A GLANCE

    NET PROPERTY INCOME

    $29.3 million (+6.9%)

    DISTRIBUTABLE INCOME

    $19.49 million (+3.5%)

    DISTRIBUTION PER UNIT

    2.45 cents (-2.8%)

The trust manager attributed its performance to the full-year contribution of its Australian property 357 Collins Street, Melbourne, which it acquired last year, and the better performance of Alexandra Technopark owing to higher rentals, lower utility expenses and upfront rental income received. This was offset by the weaker Australian dollar in the year, it added, as well as lower occupancies for China Square Central and Central Park.

The manager said it has a healthy average occupancy rate of 93 per cent for the portfolio as at Sept 30.

It said that the occupancy rate for its Singapore properties was affected by the lower occupancy rate at China Square Central due to ongoing construction work for the hotel and a commercial project there.

Construction works for the development of a 16-storey hotel and commercial project at China Square Central are expected to be completed by mid-2019. The hotel is being developed by an entity of Frasers Centrepoint and will be operated by Frasers Hospitality under the "Capri by Fraser" brand.

"With the weaker global economic environment and Singapore office market outlook, we will continue to adopt proactive asset management and leasing initiatives," said Mr Low. "In view of the weaker environment, we will also review opportunities for asset enhancements to reposition the properties to stay competitive."

A version of this article appeared in the print edition of The Straits Times on October 21, 2016, with the headline 'Frasers Commercial Trust delivers record distributable income'. Print Edition | Subscribe