Frasers Commercial Trust - OCBC Investment 2017-01-24: Flat performance in-line with expectations

Frasers Commercial Trust - OCBC Investment 2017-01-24: Flat performance in-line with expectations FRASERS COMMERCIAL TRUST ND8U.SI

Frasers Commercial Trust - Flat performance in-line with expectations

  • Frasers Commercial Trust (FCOT) reported its 1QFY17 results which met our expectations.
  • Gross revenue inched up 0.1% YoY to S$39.7m and formed 24.8% of our FY17 forecast, while DPU of 2.51 S cents was similar to 1QFY16 and accounted for 25.3% of our full-year projection.
  • On a portfolio basis, FCOT’s occupancy was unchanged QoQ at 93.0%, as at 31 Dec 2016.
  • Management achieved a positive rental uplift of 8.5% at Alexandra Technopark (ATP), while Central Park saw a negative rental reversion of 17.2%, although this was for a retail space which represented only 0.1% of the property’s NLA.
  • From our understanding, HP Singapore and HP Enterprise Singapore, which collectively contributed 17.5% of FCOT’s gross rental income, have not given an indication on whether they would be extending their leases upon expiry in Sep-Nov this year. 
  • Separately, FCOT announced that it would be carrying out an AEI at ATP to create a new campus environment aimed at providing more community-friendly spaces and amenities. The estimated cost is S$45m, and is scheduled to commence in mid-2017, with expected completion around mid-2018. FCOT expects its tenants to continue their operations with minimal disruption during the AEI as construction works will be carried out in phases and involve primarily common areas. 
  • We maintain our BUY rating and S$1.48 fair value on FCOT.




Wong Teck Ching Andy CFA OCBC Investment | http://www.ocbcresearch.com/ 2017-01-24
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 1.480 Same 1.480



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