Frasers Commercial Trust reports fiscal 1Q net property income fell 15 percent

Frasers Commercial Trust reported its fiscal first quarter net property income fell 15.0 percent on-year to S$21.12 million as revenue fell and on higher property tax at Alexandra Technopark and higher amortization of lease incentives for the Central Park and 357 Collins Street properties.

Gross revenue for the quarter ended 31 December fell 10.7 percent on-year to S$31.55 million, it said in a filing to SGX after the market close on Friday. That was mainly due to lower occupancy rates for its Singapore properties, the divestment of 55 Market St. at the end of August 2018, and a weaker Australian dollar, the trust said.

The distribution per unit (DPU) was 2.40 Singapore cents, flat on-quarter and on-year, FCOT said, adding it would be paid out on 1 March.

Daiwa had estimated the trust would report a distribution per unit of 2.39 Singapore cents for the October-to-December quarter, down 0.5 percent on-year, with revenue down 8.3 percent on-year at S$32.4 million and net property income down 12.0 percent on-year at S$21.9 million. It rates the unit at Hold.

The net property income figures were before contributions from the trust’s 50 percent indirect interest in Farnborough Business Park (FBP) in the U.K., which is part of a joint venture and is equity accounted, it said, noting it was acquired on 29 January 2018. Including the attributable portion, portfolio net property income would have been S$24.7 million for the quarter, it said.

The trust manager said it expected FBP’s performance to remain stable, despite Brexit-related uncertainties, as it has a high-quality tenant base and an occupancy rate of 98.1 percent.

Frasers Commercial Trust’s portfolio holds China Square Central and Alexandra Technopark in Singapore, a 50 percent interest in Central Park in Perth, a 100 percent indirect interest in Caroline Chisholm Centre in Canberra, a 100 percent indirect interest in 357 Collins Street in Melbourne,, and a 50 percent indirect interest in FBP in Farnborough.

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