SINGAPORE (Jan 23): The manager of Frasers Commercial Trust (FCOT) has declared a distribution per unit (DPU) of 2.4 cents for 1Q18, a 4.4% decline from 2.51 cents in the preceding year on lower revenue.

Gross revenue for the quarter fell 11% to $35.3 million from $39.7 million a year ago on lower income across all six properties in the trust’s portfolio, led mainly by lower contributions from China Square Central, Alexandra Technopark and Central Park.

Net property income (NPI) for the quarter was $24.9 million, down 15% from a year ago due to lower income contribution from Alexandra Technopark, China Square Central, Central Park and 55 Market Street on the back of lower occupancy rates.

Also contributing to the lower NPI were the effects of the average weaker Australian dollar which led to a higher foreign exchange loss in comparison to 1Q16.

Starting from this quarter, FCOT’s manager, Frasers Centrepoint Asset Management (Commercial) says it will be applying the distribution reinvestment plan (DRP), which provides unitholders with the option to receive their distributions declared either in the form of Units or cash, or a combination of both.

Further, the manager highlights FCOT’s expansion of its investment mandate to Europe, with an initial focus on the UK beginning with the acquisition of Farnborough Business Park (FBP), which is expected to complete by end-Jan.

The acquisition is expected to be DPU-accretive to unitholders.

See: Frasers Centrepoint and Frasers Commercial Trust acquire Farnborough Business Park for $314.8 mil

“We look forward to the inclusion of FBP in FCOT’s portfolio. FBP is a solid asset with strong fundamentals including a well-connected location, good building quality, a high occupancy rate, long-dated leases and well established corporate tenants. It will add quality, defensiveness and diversity to FCOT. It will add quality, defensiveness and diversity to FCOT,” says Jack Lam, CEO of the manager.

“We also look to extract further value from FBP by, for example, leveraging on portfolio synergies and market power afforded by the network of business parks, namely Winnersh Triangle, Chineham Park and Watchmoor Park, that FCL owns in Thames Valley,” he adds.

Units in FCOT closed 2 cents higher at $1.55 on Monday.