FCOT

FCOT: 4Q13 DPU increased by 19% y/y to 2.08¢, in line with the 21% increase in distributable income to $13.7m. The boost came from the net conversion and redemption of Series A CPPU and resulting reduction in interest expenses. NPI and gross revenue fell 17% and 19%, respectively, as higher contribution from China Square Central was offset by the weaker Australian dollar and nil contribution from KeyPoint and Japan properties following their divestments. Occupancy rate fell marginally by 0.2ppt q/q to 97.9%, and the weighted average lease to expiry is 4.6 years. Gearing is 37.7% with an average borrowing rate of 2.7%. There were positive rental reversions ranging from 4.4% to 23.2%. Management highlighted that the rental reversionary potential of properties, potential higher occupancy rates, and newly enhanced China Square Central will drive growth for the future. A $100.5m fair value gain from an upward revalution of properties boosted its NAV to $1.57. As such, FCOT trades at 0.82x P/B. Full year DPU of 7.83¢ largely in line with consensus, and translates to a yield of 6.1%. 4Q13 annualized yield is 6.5%.