On 21st April 2016, Frasers Commercial Trust announce its 2Q2016 financial results. Distribution Per Unit (“DPU”) rises 2.9% to 2.45 cents as compared to 2.38 cents in the same quarter in 2015.
Higher Distribution Amount
The higher distribution amount was due higher rental rates and lower utilities expenses at Alexandra Technopark, contribution from 357 Collins street and lower repair and maintenance and painting expenses for Caroline Chisholm Centre.
| 2Q2016 (S$’000) | 2Q2015 (S$’000) | YoY(%) | |
| Gross Revenue | 38,994 | 34,814 | 12 |
| Net Property Income | 28,836 | 24,716 | 16.7 |
| Distributable Amount | 19,348 | 16,189 | 19.5 |
| Distribution Per Unit (“DPU”) (cents) | 2.45 | 2.38 | 2.9 |
Occupancy
Average occupancy stood at 92.6%.
Weighted Average Lease Expiry
The Weighted Average Lease Expiry (“WALE”) stood at 3.3 years. There is low lease expiries for FY16. The well spread lease expiry provide income stability.
Positive Rental Reversion
China Square Central achieved a positive rental reversion of 2.4%. 55 Market Street achieved a positive rental reversion of 5.4%. Alexandra Technopark achieved a positive rental reversion of 5.3%. What I like about Frasers Commercial Trust is that 52% of the leases have built in step up rents.
Top 10 Tenants
The leases of majority of top 10 tenants are expiring in 2017. Investors should monitor if the leases will be renewed.
Debt
There is no financing required until FY17. 81% of gross borrowings are hedged on fixed rate.
Things to Note
Developments at China Square Central
Development works have started at China Square Central. The construction is expected to complete by 2019.