A Quick Investing Guide to Frasers Commercial Trust

Credit: Simon Cunningham

Frasers Commercial Trust (SGX: ND8U) is a REIT that focuses primarily on commercial properties. For investors looking at Frasers Commercial Trust, it’s worthwhile knowing the REIT’s property profile, its leases and tenants, and its latest results. So, here they are.

Property profile

The diagram below shows all six of Frasers Commercial Trust’s properties, of which three are in Singapore and three are in Australia. The first row in the diagram are for the Singapore properties, while the second row are for the Australian properties.

Source: Frasers Commercial Trust 2Q FY17 (second quarter of fiscal year ending 30 September 2017) earnings presentation

As you can see, Frasers Commercial Trust’s Singapore properties have pretty short weighted average lease expiries (WALEs) of just 1.3 years each. But, the occupancy rates for the offices aren’t too bad at between 91% and 96%. In Australia, the REIT’s WALEs are much longer. It also has properties that are fully occupied.

Leases and tenants

Here’s a table showing the top 10 tenants of Frasers Commercial Trust and when their leases will expire:

Source: Frasers Commercial Trust 2Q FY17 earnings presentation

We can see that the REIT’s rental income stream is concentrated, given that its top 10 tenants account for 60.9% of its rental income in 2Q FY2017. In other words, if the REIT loses a significant client – such as the Commonwealth of Australia – its rental income will see a significant impact.

There’s a bright spot in there though. The REIT’s largest tenant, which is the Commonwealth of Australia, has a lease that extends all the way to 2025.

Latest results

The table below shows the year-on-year changes in some of the REIT’s important numbers for the first quarter of 2017:

Source: Frasers Commercial Trust 2Q FY17 earnings presentation

The REIT’s latest quarter was a positive one, as there was growth in its revenue, net property income, distributable income to unitholders, and distribution per unit.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.