Frasers Commercial Trust

Frasers Commercial Trust: 1QFY14 results in line; Frasers Commercial Trust (FCOT) 1QFY14 distributable income spiked 33% y/y to $13.7m and DPU accelerated 30% to 2.05cts as a result of lower interest costs from capital management initiatives, as well as the conversion of Series A CPPUs. Gross revenue dipped 3% to $28.8m and NPI declined 4% to $22.1m on the back of a weaker AUD and slightly lower occupancy for Central Park, offset by the improved performances of S'pore properties. Average portfolio occupancy rate at 97.1% (-0.8ppts q/q) with weighted average lease to expiry of 4.4 years. Aggregate leverage of 37.9% (+0.3ppts) at an all-in interest rate of 2.7%. NAV of $1.54. At $1.27, FCOT trades at 6.5% forward yield and 1.2x P/B. Latest broker recommendations: CLSA maintains Outperform with $2.00 TP StanChart maintains Underperform with $1.15 TP