Friday, 21 April 2017

Frasers Commercial Trust (FCOT) Q2FY17

Overall

  1. Dividend no change compare to previous quarter 1Q17
  2. 100m debt due in FY17 has been refinance and left 80m to be refinance
  3. Rent seem to stabilize for Singapore market
  4. No update on HP lease renewal (bargaining the rental rate ??? 😆)
  5. Perth office sector remain challenging

Dividend

Dividend of 2.51 cent is the same as of previous quarter 1Q17 which also inclusive of the income support due to the hotel development in China Square and again management has opt to receive the fees in cash instead of units.

Lease Expire Profile

There still no much news development on whether HP will be renewing its lease.

FY17 Lease expiry profile reduced to 13.8% and below are the breakdown from the presentation slides
  • 5.2% - China Square Central
  • 1.2% - 55 Market Street
  • 6.8% - Alexandra Technopark (Includes 5.4% for Hewlett-Packard Enterprise)
  • 0.6% - Central Park 

FY18 Lease expiry profile will be 29.7% where about 12.1% is HP.


Rent seem to be stabilizing from the trend below and reflected in the recent rental reversion except for Central Park where the office market has 22.5% vacancy rate.





Debt Profile

Nothing much has change from the previous Q117 except the below
  • 100m out of 180m has been refinanced and move to FY20 with the interest rate of 2.625%
  • 50m out of 207 has been refinanced and move to FY21 with the interest rate of 2.783%
  • Interest rate for SGD loan has increased to 2.63% from previous 2.59%
  • Interest rate for AUD loand has decreased to 3.91% from previous 3.93%
  • Interest coverage ratio remain healthy at 4.5 times