Last week (on 19 October 2018), Frasers Commercial Trust (SGX: ND8U) announced its fourth quarter and full year earnings update for its financial year ended 30 September 2018 (FY2018). As a quick introduction for better context later, Frasers Commercial Trust is a REIT that focuses primarily on commercial properties. It currently has ownership stakes in six commercial properties located in Singapore, Australia and United Kingdom.
Here are 10 things investors should know about Frasers Commercial Trust’s latest results:
1. Gross revenue for the fourth quarter of FY2018 declined by 15.2% year-on-year to S$32.5 million while net property income (NPI) fell by 19.2% to S$21.6 million.
2. The distribution per unit (DPU) dipped slightly by 0.4%, from 2.41 cents a year ago to 2.40 cents.
3. Based on Frasers Commercial Trust’s full year DPU of 9.60 cents and its closing unit price of S$1.42 as of 22 October 2018, the REIT has a trailing distribution yield of 6.8%.
4. As of 30 September 2018, the REIT’s gearing stood at 28.3%, which is a safe distance from the regulatory gearing ceiling of 45%.
5. The REIT’s portfolio had a committed occupancy rate of 83.4% at the end of FY2018’s fourth quarter. The committed occupancy rates for the Singapore, Australia, and United Kingdom portions were 75.7%, 89.0%, and 98.1%, respectively.
6. The weighted average lease to expiry for Frasers Commercial Trust’s portfolio (by rental income) was 4.7 years as of 30 September 2018. 50.3% of the REIT’s leases will expire between 2019 and 2022 with the rest expiring after 2023.
7. On 31 August 2018, Frasers Commercial Trust completed the sale of 55 Market Street to an unrelated third party for S$216.8 million.
8. The asset enhancement initiative (AEI) at Alexandra Technopark is nearing completion while the AEI at China Square Central will be completed around mid-2019.
9. Frasers Commercial Trust has rights of first refusal (ROFRs) on a property pipeline worth more than S$4 billion.
10. Jack Lam, the chief executive officer of Frasers Commercial Trust’s manager, shared the following comments on the REIT’s prospects in the latest earnings update:
“Long-term growth will also come from enhancing our assets and on that note we are pleased that the revamp of Alexandra Technopark is nearing completion and has already garnered very encouraging feedback from tenants and other stakeholders. Likewise, we eagerly look forward to completing the rejuvenation of the retail podium at China Square Central in the later part of 2019,”
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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.