Frasers Commercial Trust (FCOT) reported an inline set of results for 4Q17. Gross revenue fell 3% YoY to S$38.3m while DPU fell by 2% YoY to 2.41 S-cents. On a FY basis, FCOT’s gross revenue of S$156.6m and DPU of 9.82 S-cents constituted 99.8% and 100.1% of our FY17 forecast, respectively.

Gross revenue in 4Q17 witnessed some softness due to lower occupancy rates for Alexandra Technopark, China Square Central and Central Park, though offset by the effects of a stronger Australian dollar. Higher repair and maintenance expenses for Caroline Chisholm Centre also weighed on net property income.

While distributable income to unitholders remained flat at S$19.4m in 4Q17, DPU fell due to the enlarged unit base.

Pending an analyst briefing later today, we place our S$1.42 fair value estimate under review. Maintain HOLD.

Source: OCBC Research - 20 Oct 2017