The result for Q2 FY2018 result is expected
- Gross revenue drop from $35m to $33m
- Dividend is supported by
- gain from disposal of hotel development rights $2.9m, in Q1 FY2018 it was supported $1.9m
- Manager fees is paid fully in unit
For Q3 FY2018 performance, I guess
- The acquisition in Feb will start to fully contribute to the revenue
- The impact of losing 131,149 sf due to HP will start to fully impact the revenue and additional 42,561 sf will also materialize by Apr 2018
- Alexandra occupancy rate currently still around 70%
- Q3 Dividend will again likely be supported by
- Gain from disposal of hotel development (currently it has paid around $10m out of $44m)
- Manager fees to be paid full in unit
For the threat from rate increase,
I think it should be minimal as currently the average interest rate is at almost 3%.
For the lease expire,
Only 11% to expire in FY18 and 19.3% in FY19. With the demand and rental is stabilising, FCOT should be fine even there is a chance the rental reversion will be negative for the office segment as looking back at 3 years back which is 2015, the rental is pretty on the peak side
In summary,
My view is nothing much to be expected from the DPU, if it can remain flat it will be good enough which yield around 6.5% as the Manager is trying to stabilize the occupancy rate and catch up for the amount of the dividend that is currently paid from gain of hotel development and fee that is paid in unit.Q1 FY2018 Post
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