Frasers Commercial Trust

Frasers Commercial Trust: OCBC maintains Buy with $1.45 TP. Note that the REIT has essentially locked in robust growth for FY14 with lower interest costs and the redemption of its 321.9m Series A Convertible Perpetual Preferred Units (CPPUs) this year. In addition, expect FCOT to gain from its growth initiatives embarked over the past year. For one, FCOT has completed the Precinct Master Plan and asset enhancement works for the office tower at China Square Central, and is likely to benefit from improved occupancy and higher secured rentals going forward. Moreover, FCOT has successfully completed the renewal of 511,000 sqft of the underlying leases at Alexandra Technopark and has achieved positive rental reversion of 17.4% at the property. According to the latest report by DTZ, note that sequential rental increments were seen within the CBD in 3Q13 on the back of better occupancy rates. This is consistent with view that office leasing activity is likely to remain healthy.