10 Things to Know About Frasers Commercial Trust’s Latest Earnings

Frasers Commercial Trust (SGX: ND8U), as the name suggests, is a commercial real estate investment trust (REIT) that has stakes in six commercial buildings located in Singapore and Australia.

In Singapore, the properties it owns are China Square CentralAlexandra Technopark and 55 Market Street. Frasers Centrepoint Ltd (SGX: TQ5) is the REIT’s sponsor.

This morning, the commercial REIT announced its financial results for the twelve months ended 30 September 2017 (FY2017). The reporting period was from 1 October 2016 to 30 September 2017.

Here are 10 things investors should know from the earnings announcement:

1. Gross revenue of S$156.6 million for FY2017 was flat as compared to a year ago.

2. Net property income slid 1.5% year-on-year to S$113.8 million, mainly due to the higher repair and maintenance expenses for Caroline Chisholm Centre and lower occupancy rates at Alexandra Technopark, China Square Central and Central Park.

3. Distributable income went up 1.3% to S$78.6 million.

4. Distribution per unit of 9.82 cents was flat year-on-year, as the higher distributable income was offset by the increase in the number of units from a year ago.

5. The portfolio average committed occupancy rate was 85.9%, as of 30 September 2017. The overall average committed occupancy rate for the Singapore portfolio was 77.8% and that for the Australian portfolio was 96.5%.

6. For FY2017, the weighted average rental reversion was 1.9%.

7. As of 30 September 2017, the weighted average debt expiry for the REIT was 2.5 years. Gearing was at 7%, and interest rates for 80.7% of borrowings are either fixed or hedged. The trust does not have any debt maturing until August 2018.

8. The net asset value (NAV) per unit was at S$1.60, as of 30 September 2017. One year ago, the NAV came in at S$1.55.

9. Alexandra Technopark is currently undergoing an asset enhancement initiative (AEI) and this will be completed around mid-2018. The REIT’s manager is currently carrying out proactive leasing and asset management strategies to normalise occupancy at the property. This is because Hewlett-Packard Enterprise Singapore would not be renewing its leases at Alexandra Technopark after they expire fully on 30 November 2017.

10. The retail podium of China Square Central will undergo an AEI in the first quarter of 2018, and this is expected to be completed around mid-2019. The rejuvenation, together with the introduction of a new Capri by Fraser hotel in 2019, will complete the overall revamp of China Square Central.

The trust ended Friday at S$1.41, up 0.7% for the day. This gives a price-to-book ratio of 0.88 and a distribution yield of 7%.

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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 Sudhan P doesn’t own shares in any companies mentioned.