Frasers Commercial Trust (FCOT) announced that it has received confirmation from HewlettPackard Singapore Pte Ltd (HPS) on the extension of a portion of its lease at Alexandra Technopark (ATP). Specifically, HPS will be extending an aggregate of 266,905 sqft of space out of the 304,920 sqft that they currently occupy.

Around 43.0%/14.0%/30.6% of the extended lease will be for 2-3/5/13-month periods, respectively. The improved clarity arising from this development, in our view, will allow the manager to acquire tenants to backfill the upcoming vacancies in an effective and targeted manner.

However, we note that the 2-3 month extension for 43.0% of the extended lease will leave limited time for the manager to find replacement tenants. For now, we maintain our HOLD rating and S$1.42 fair value estimate..

Source: OCBC Research - 6 Nov 2017