Frasers Commercial Trust

Frasers Commercial Trust (FCOT): OCBC maintains BUY with $1.45 TP; House see FCOT as the beneficiary of this potential market upturn, in view of its exposure to the Singapore office space. OCBC expects FCOT to continue to benefit from the positive flow-through on its DPU through distribution savings from its convertible perpetual preferred units. OCBC note that FCOT's portfolio assets are currently under-rented, and that the existing vacant spaces are expected to place FCOT in a good position for further income growth. According to CBRE MarketView report, CBRE anticipates continued rental growth in the office market for the next two years amid limited office supply and tightening of available office space. Based on its last price, FCOT is trading at undemanding P/B of 0.81x and offers a compelling FY14F yield of 7.1%.