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Tuesday, January 22, 2019

Frasers Commercial Trust - On its way up

There is talk  on the street that Google is interested to lease the vacant space at Alexandra Technopark.

One may recall that the occupancy rates of Alexandra Technopark was left in tatters after HP terminated its lease and moved out. The space has since undergone AEI and should Google decide to lease space, the occupancy of the asset will become close to 100% (from its current 68.6%).

I bought a bit FCOT a few months back, hoping for something like this to happen. While this is all speculative at this stage, one can be forgiven for being cautiously optimistic that the occupancy of the Technopark won't stay low for an extended period.

Coupled with an comparatively low gearing of 28.3%, which is way below the regulatory ceiling of 45%, there is also more than fair chance that some form of acquisition (in UK?) may happen in 2019.

All in all, FCOT seems to be poised for recovery.  DBS has a TP of $1.70, which seems a tad unrealistic. Nevertheless, even at current prices, FCOT has a trailing yield approaching 7%, which is more than decent compared to its peers (Capitacom trust, K-Reit). OUE Com Reit appears to have a slightly higher trailing yield but its gearing has exceeded 41%, which leaves it little room to manoevre before unit holders have to pump in funds via even more rights issues. 

FCOT declared a distribution per unit of 2.40 cents, payable on 1 March 2019. Looking forward to receiving my first dividend from FCOT. 

Let's hope the best, but be prepared for the worst.

Onward to FI!


  1. Nice article, thanks for taking your time to discuss Frasers Commercial Trust, the information provided can be very useful.

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