Hewlett Packard Vacates Alexandra Technopark

Frasers Commercial Trust Logo

Previously, I wrote about the investment risk of Frasers Commercial Trust which is the lease expiry for Hewlett-Packard ( Frasers Commercial Trust Long Term Play in Office Rental ). The fear has turned into reality. Frasers Commercial Trust has announced that it has been informed by Hewlett-Packard Enterprise Singapore Pte Ltd (“HPE”) that they will vacate their space at Alexandra Technopark upon the expiration of relevant leases on 30 September and 30 November this year.

The rental income for the space to be vacated makes up 6.6% of FCOT’s total gross rental income for the month ended 30 June 2017. In the announcement, the manager revealed that they have already secured a new tenant for 13.4% of the space to be vacated. Read More

Frasers Commercial Trust Long Term Play in Office Rental

Frasers Commercial Trust Logo

While most REITs are announcing their 4Q2016 or FY2016 financial results, Frasers Commercial Trust is actually announcing their 1Q2017 financial results.

Net Property Income fell by estimated 1% due to lower occupancy for China Square Central and Central Park. We understand that China Square Central has started the development of a 16 storey hotel and the construction works will definitely affect occupancy at China Square Central. The income disruption is supplemented by S$0.9 million capital distribution. Development work is expected to be completed by mid-2019.

There are certainly many construction works going on for Frasers Commercial Trust with hotel development works at China Square Central and Alexandra Technopark performing asset enhancement works soon.

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Summary of REITs Financial Results in 1Q2016

Most or all of the REITs in my portfolio have completed announcing their 1Q2016 results. There are some hits and some misses. As shown in the table I summarized below, Distribution Per Unit (“DPU”) increases for 6 out of 11 REITS I am holding while DPU fell for the other 5.

DPU fell for those REITs that focuses on a single industry sector such as industrial, retail or office. REITs like Suntec REIT which has a combination of office and retail survived the economy downturn. Mapletree Commercial Trust did fairly well too as it has a combination of office and retail (Vivocity).

Those with overseas assets did well too. Frasers Commercial Trust has both Singapore and Australian properties. Lippo Malls Indonesia Retail Trust did well as its malls are in Indonesia.

Having said so much, I just want to highlight the importance of diversification of portfolio.

Stock Name

Date Of Release

Of

Financial Results

Dividend Per Unit (DPU)

Increase or Fall

Frasers Commercial Trust Wednesday, 20 January 2016 DPU Increase
CapitaMall Trust Friday, 15 April 2016 DPU Increase
Keppel Reit Thursday, 14 April 2016 DPU Fall
Soilbuild Business Reit Thursday, 14 April 2016 DPU Fall
Suntec REIT Thursday, 21 April 2016  DPU Increase
Mapletree Commercial Trust Tuesday, 26th April 2016   DPU Increase
Parkway Life Reit Tuesday, 26th April 2016   DPU Fall
Far East Hospitality Trust Wednesday, 27th April 2016   DPU Increase
Cambridge Industrial Trust Thursday, 28th April 2016   DPU Fall
Lippo Malls Indonesia Retail Trust Tuesday, 3rd May 2016   DPU Increase
OUE Hospitality Trust Friday, 6th May 2016 DPU Fall