The manager

Our commitments are to invest, build and improve lives
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From left to right: Mr Bobby Chin Yoke Choong and Mr Jack Lam.

Dear Unitholders

We are pleased to have delivered a distributable income of S$78.6 million for FY2017, the highest since FCOT’s listing in 2006.

Dear Unitholders,

On behalf of Frasers Centrepoint Asset Management (Commercial) Ltd, the Manager FCOT, we are pleased to present the Annual Report for FY2017.

Distributable income increased 13% year-on-year in FY2017.

We are pleased to have delivered a stable set of results for our Unitholders in FY2017, despite continued challenges and uncertainties in the market environment. Full-year distributable income of S$78.6 million was the highest since FCOT’s listing in 2006 and also 1.3% above that of FY2016. Full-year distribution per Unit remained stable at 9.82 cents due to the increase in number of Units in issue. Our proactive asset management approach and prudent capital and risk management strategies continue to be key in delivering long-term value.

For FY2017, portfolio gross revenue of S$156.6 million was in-line with that of FY2016. Net property income (NPI) recorded a slight decline of 1.6% year-on-year to S$113.8 million. This was mainly due to higher repair and maintenance expenses for Caroline Chisholm Centre and lower occupancy rates at Alexandra Technopark, China Square Central and Central Park. However, we achieved better occupancy and passing rents at 357 Collins Street and benefitted from the effect of the stronger Australian Dollar. On cash basis (excluding the effects of recognising accounting income on a straight line basis over the terms of the leases), portfolio NPI increased by 1.0% year-on-year to S$114.9 million in FY2017.

In FY2017, finance cost decreased by 1.3% year-on-year mainly due to the lower amortisation of borrowing costs, coupled with lower capitalised borrowing costs being expensed off as a result of partial early refinancing of loan facilities.

Creating long-term value by enhancing the properties

We continuously look for opportunities to create additional and long-term value for our properties.

In January 2017 we announced a S$45 million assetenhancement initiative for Alexandra Technopark (ATP AEI). The ATP AEI, which is on-track to complete by around mid-2018, aims to transform the property into a vibrant, engaging and stimulating business campus and a sought-after business address. With emphasis on creating a well-balanced work environment and a connected community, many new amenities and facilities will be introduced. These will include a new amenity hub, futsal courts, end-of-trip facilities, community farming plots and social and fitness-related programmes, among others.

In September and November this year, we were informed by two key tenants, Hewlett-Packard Enterprise Singapore Pte Ltd and Hewlett-Packard Singapore Pte Ltd, of the non-renewal of a portion of their leases at Alexandra Technopark1. We will continue to carry out proactive leasing and asset management measures to normalise occupancy at the property. We also see the downsizing of these tenants as an opportunity to introduce a more refreshed and diverse tenant mix into Alexandra Technopark. This will not only dovetail with the aims of the ATP AEI, but also provide greater risk diversification for FCOT in the longer term.

In October this year, we announced plans to carry out a S$38 million2 asset enhancement initiative for the retail podium of China Square Central (CSC Retail AEI). The CSC Retail AEI aims to rejuvenate the mall, improve its tenancy mix and upgrade the shopper experience. The lettable area within the mall is also expected to increase by more than 10,000 sq ft to around 75,000 sq ft2. The CSC Retail AEI is expected to commence in early-2018 and be completed around mid-2019. This timely and forward-looking move will enable the mall to better capitalise on the uplift in human traffic and general activity level that are expected to come about from the planned opening of the new Capri by Fraser hotel3 within the development in 2019.

Both the ATP AEI and CSC Retail AEI aim to improve the long-term income potential of the assets, so as to create long-term value for FCOT.

Portfolio value increased 4.1% to S$2.1 billion

The independent valuers have valued FCOT’s properties at S$2.1 billion as at 30 September 2017, an increase of S$81.6 million or 4.1% compared to a year ago. In-line with market conditions, the values of the properties as at 30 September 2017 generally gained from firmer capitalisation rates versus those prevailing a year ago. The Australia portfolio accounted for S$79.1 million of the increase, partly also due to higher rents for Caroline Chisholm Centre and 357 Collins Street and the stronger Australian Dollar compared to a year ago.

As at 30 September 2017, the net asset value per Unit (excluding distributable income) increased to S$1.58 or 3.9% compared to a year ago.

Continued prudent and proactive capital management

In the first half of FY2017 we took advantage of favourable market conditions to carry out early refinancing of all debts due in the financial year, as well as partially pre-paying debt maturing in FY2019.
In aggregate, FCOT raised S$230.0 million from the issuances of three tranches of fixed and floating rate unsecured notes under its S$1.0 billion Multicurrency Medium Term Note Programme, with the funds raised deployed towards the aforesaid refinancing.

FCOT has an overall healthy debt position. As at 30 September 2017, gearing4 of 34.7% was well below the 45% limit for Singapore REITs set by the Monetary Authority of Singapore, and interest rate coverage ratio5 was 4.4 times. In addition, all debts are unsecured, which provides a greater degree of financial flexibility; and the interest rates for approximately 80.7% of borrowings as at 30 September 2017 have either been fixed or hedged, providing certainty in interest cost and protecting FCOT from interest rate hikes.

Driving sustainability

We are committed in our sustainability efforts and in upholding good corporate governance practices, and continue to make good progress across various fronts. We believe that our commitment and resources invested in improving the environment, social and governance spects of the business and operations of FCOT will be financially, socially and environmentally beneficial to our unitholders and other stakeholders in the long-term.

Our third Sustainability Report, which is included in this Annual Report, was prepared in accordance with the international guideline for sustainability reporting, namely the Global Reporting Initiative (GRI) Standards 2016 - Core Option, and we hope that it provides to you a good summary of our progress to-date and our plans or the future. We are also pleased to note that FCOT continues to be constituents of the SGX Sustainability and Sustainability Enhanced Indices6. Also noteworthy is that FCOT is a signatory to the 2017 Corporate Governance Statement of Support organised by the Securities Investors Association (Singapore), where the Trust has pledged its commitment to uphold high standards in corporate governance.

Last but not least, we are delighted that FCOT received three major awards in FY2017 relating to good corporate governance and communications and investor relations. FCOT received Gold awards for the ‘Best Governed and Most Transparent Company’ and the ‘Best Corporate Communications and Investor Relations’ categories at The Global Good Governance Awards 2017TM, as well as Gold award for ‘Best Annual Report’ in the REITs and Business Trusts category at the prestigious Singapore Corporate Awards 2017. These awards are clear testaments of our longstanding commitment and efforts towards upholding high standards of corporate governance and investor relations practices.


The Ministry of Trade and Industry expects the Singapore economy to grow by 3.0% to 3.5% in 2017, and by 1.5% to 3.5% in 20187. As for Australia, the Reserve Bank of Australia expects the economy to grow between 2.0% to 3.0% in 2017, before increasing to around 2.75% to 3.75% in 2018.

For the Singapore office market, there are indications that sentiments are beginning to turn more positive on the back of stronger economic fundamentals. Nonetheless, rental growth is expected to be modest over the near term as the market works to absorb and accommodate the significant supply that has been added over the last two years8. For the FCOT portfolio, we are looking forward to the upgrading and repositioning of both Alexandra Technopark and the retail podium of China Square Central, as we see these enhancements as key in improving and sustaining the long-term income performance and market potential ofthese assets

For Australia, Caroline Chisholm Centre in Canberra and 357 Collins Street in Melbourne enjoyed full occupancies as at 30 September 2017, and are expected to continue to provide income stability to the portfolio in FY2018. As for Central Park in Perth, it is expected to benefit from signs of the market bottoming and the ‘flight to quality’9 situation that is playing out as businesses actively seek to upgrade to better locations during this period of time when market conditions are tilted in tenants’ favour.

We will continue to be proactive and prudent in managing the assets and the Trust as a whole, while looking into opportunities in new markets so as to continue to deliver long-term value to our Unitholders. We will continue to source for appropriate investment opportunities, including outside the Trust’s current geographical footprint of Singapore and Australia, with a view to diversifying and strengthening the asset portfolio and providing long-term value and income growth potential for Unitholders.


Dr Chua Yong Hai and Mr Tan Guong Ching retired from the Board of the Manager with effect from 30 November 2017. Dr Chua and Mr Tan had both served as Non- Executive and Independent Directors since 2006. In addition, Dr Chua was the Chairman of the Board since 2006, while Mr Tan was the Chairman of the Nominating and Remuneration Committee of the Board since its establishment in FY2016. We would like to express our sincere appreciation for their significant and valuable contributions to the Board and wise counsel to the management team over more than a decade of service.

The Board is pleased to welcome Mr Bobby Chin Yoke Choong and Mr Chang Tou Chen as Non-Executive and Independent Directors. Mr Chin has also been appointed as the Chairman of the Board and Mr Chang as Chairman of the Nomination and Remuneration Committee of the Board, with effect from 30 November 2017. Mr Chin and Mr Chang will both bring on-board considerable wealth of business knowledge and work experiences from their extensive careers. The Board looks forward to their contributions in setting and guiding the strategic direction of FCOT going forward.

In conclusion, the Board would like to thank our Unitholders, the Trustee, tenants, service partners and other stakeholders for their continued support of FCOT. We would also like to express our appreciation to the management team for their continued dedication and commitment in managing and growing the Trust. We look forward to meeting with our Unitholders at the upcoming Annual General Meeting to be held on 22 January 2018.

Chairman and Independent
Non-Executive Director



Chief Executive Officer

  1. Refer to the announcements dated 22 September 2017 and 3 November 2017 for details.
  2. Refer to press release dated 20 October 2017 for details.
  3. Refer to the Circular to Unitholders dated 3 June 2015 for further details.
  4. Gross borrowings as a percentage of total assets.
  5. Calculated based on net income before changes in fair values of investment properties, interest expense and income, other investments and derivative instruments, income tax and distribution; and adding back certain non-recurring items/cash finance costs.
  6. Source: SGX Sustainability Indices as at September 2017.
  7. Source: Ministry of Trade and Industry Singapore, 23 November 2017.
  8. Source: CBRE, Singapore Market View, Q3 2017.
  9. Colliers International, Research and Forecast Report, CBD office second Half 2017.
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About our Manager

FCOT is managed by Frasers Commercial Asset Management Ltd., a subsidiary of FCL.

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Growth strategies

FCOT strives to become a leading owner of quality commercial real estate properties, a landlord of choice for businesses and a preferred investment choice among investors. This ambition is enabled by our unifying idea, which we share with our sponsor, FCL.

Executive Officers


From left to right: Ms Wang Mei Ling, Ms Tricia Yeo, Ms Cheah Yoke Lan, Mr Jack Lam, Ms Janet Soh and Mr Wong Soon Yean.

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