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From left to right: Mr Bobby Chin Yoke Choong and Mr Jack Lam.

Dear Unitholders

We continued our efforts in strengthening and reshaping the portfolio for long-term growth, resulting in tangible outcomes from some of these initiatives.

Dear Unitholders,

FY2019 was another fruitful year overall as we continued our efforts in strengthening and reshaping the portfolio for long-term growth, resulting in tangible outcomes from some of these initiatives. Key highlights include the completion of two major asset enhancement projects at Alexandra Technopark and the retail podium of China Square Central. We also concluded more than 800,000 sq ft of leasing transactions across the portfolio to significantly raise the committed occupancy rate to 95.0% from 83.4% the year before.

On behalf of Frasers Commercial Asset Management Ltd., we are pleased to present this Annual Report for FY2019.

Financial and Portfolio Performance

A total distribution to Unitholders of S$86.9 million was declared for FY2019, which was 5.0% higher than for FY2018. This translated to distribution per Unit of 9.60 cents, which was unchanged from FY2018.

FY2019 portfolio gross revenue was 6.2% lower year-on-year at S$125.1 million, mainly due to comparatively lower occupancy at Alexandra Technopark, divestment of 55 Market Street on 31 August 2018 and the effects of the average weaker Australia Dollar. FY2019 portfolio NPI was 7.4% lower year-on-year at S$82.7 million, mainly due to the lower gross revenue as explained earlier, higher property tax expense for Alexandra Technopark and higher quantum of lease incentives amortisation attributable to new leases at Central Park and 357 Collins Street.

The foregoing FY2019 portfolio gross revenue and NPI were before contributions from FCOT’s 50.0% interest in Farnborough Business Park, which is held as a joint venture and equity-accounted. The 50.0% interest in Farnborough Business Park was acquired on 29 January 2018 and the attributable NPI for FY2019 was S$10.2 million. Including the attributable NPI of Farnborough Business Park, portfolio NPI for FY2019 would be S$92.9 million or 3.6% lower than the corresponding figure for FY2018.

During FY2019 some 800,000 sq ft of leasing transactions, including more than 600,000 sq ft of new leases, were concluded across the portfolio. This brought the committed occupancy of the portfolio up to 95.0% as at 30 September 2019, a significant improvement from 83.4% a year ago. Portfolio performance going forward will benefit from this and other improved metrics.

Strengthening and Reshaping the Portfolio for Long-term Growth

Upgrading and future-proofing our property assets is a key focus of ours in ensuring sustainable long-term growth. In FY2019, we successfully completed two value-adding asset enhancement projects at Alexandra Technopark and China Square Central and also embarked on one for Central Park.

At Alexandra Technopark, the upgrading and repositioning of the 1.0 million sq ft property to a contemporary business campus, which commenced work in January 2017, was fully completed in January 2019. The property now boasts a greener and more pleasant environment with generous offerings of health and wellness, lifestyle and social amenities that were positively received by tenants and other stakeholders.

The rejuvenated Alexandra Technopark has attracted a wide spectrum of new local and international tenants who have overall enhanced the quality and diversity of the tenant profile. With more than 460,000 sq ft of new leases signed in FY2019, the committed occupancy stood at a high 96.8% as at 30 September 2019, compared to 70.2% a year ago. We have also witnessed a general uplift in signing rents over the past 12 months or so, in many cases by as much as 10-15% or more above the average passing rent of the property as at the end of December 2018.

It is also worth noting that the valuation of the property has risen significantly by almost S$100 million to S$606.0 million now, from S$508.0 million as at 30 September 2016 (just prior to the commencement of the upgrading works in January 2017).

At China Square Central, refurbishment and upgrading works for the retail podium at 18 Cross Street received Temporary Occupation Permit in 4Q FY2019 and commenced business operation in phases from November 2019. When the retail podium is fully operational, visitors will enjoy a refreshed mix of food and beverage, health and wellness and lifestyle offerings in a spruced-up and welcoming environment.

As part of the upgrading works, the lettable area of the retail podium has also increased by about 25% to around 80,000 sq ft due to higher layout efficiency. The increased lettable area coupled with the higher projected average rental rate are expected to significantly improve the revenue potential of the retail podium on a stabilised basis.

At Central Park, an upgrading project for the lobby and forecourt areas commenced in April 2019. The upgrading is expected to complete in 3Q 2020 at an estimated cost of S$23 million (FCOT’s 50% share: S$11.5 million). The project aims to improve tenants’ and visitors’ experiences by creating a more contemporary, vibrant and community-friendly environment through the provision of new public amenities, multi-purpose spaces and better connectivity with the public park adjacent to the property.

In addition to the above, there could potentially be other enhancement opportunities for Central Park in the future as we look to further strengthen the property’s competitive advantage as one of Perth’s premium grade business locations, in order to benefit even more from the improving outlook of the Perth office market.

Higher Portfolio Value

Total portfolio value based on independent valuations as at 30 September 2019 was S$2.2 billion1, an increase of some S$93 million or 4.4% year-on-year, notwithstanding the effects of softer Australia Dollar and Pound Sterling against the Singapore Dollar compared to a year ago. In the respective local currency, the Singapore properties, the Australia properties and Farnborough Business Park reported year-on-year valuation gains of 10.0%, 4.6% and 1.1%, respectively.

As a result of the increase in portfolio value, net asset value per Unit as at 30 September 2019 improved to 1.61 cents2, compared to 1.59 cents a year ago.

Proactive and Prudent Capital Management

We continue to take a prudent and proactive approach towards capital management.

FCOT’s gearing as at 30 September 2019 was 28.6%, one of the lowest among SREITS currently. This healthy level of gearing, which is well below the regulatory limit of 45%, provides a high degree of financial flexibility to pursue growth initiatives and capitalise on market opportunities, as well as buffer against unforeseen market risks.

FY2019 average interest coverage continued to be healthy at 4.8 times. Interest rates for approximately 87.8% of borrowings as at 30 September 2019 have either been fixed or hedged, providing certainty in interest cost and protection from interest rate volatility. In addition, all borrowings are on unsecured basis, which affords further financial flexibility.

Upholding Good Corporate Governance Practices and Sustainability

We strive to continuously maintain high standards of corporate governance and transparency to enhance the value of FCOT for the long-term. In connection with this, we are pleased to note that FCOT was ranked 5th out of 46 entries in the Singapore Governance and Transparency Index 2019 (REIT and Business Trust category) for good corporate governance and disclosure practices.

In 2019, FCOT also participated in the Global Real Estate Sustainability Board (GRESB) Real Estate assessment, which is a global environmental, social and governance (ESG) performance benchmark for listed and unlisted real estate companies and funds. We are pleased to report that FCOT achieved a rating of 4 stars out of the maximum 5 stars in the assessment with a score that outperformed the global average. In addition, FCOT was ranked 3rd among the peer group in Asia Pacific3. FCOT also scored an ‘A’ for GRESB Public Disclosure, which measures material sustainability disclosures by listed real estate companies and REITs. These results and accolades attest to our ongoing commitment to integrate sustainability consciousness into the business and operations of FCOT.


Singapore’s Ministry of Trade and Industry expects the economy to experience flattish growth of between 0.5% to 1.0% in 20194. For the Singapore office market, CBRE expects rental growth to be capped over the next six to 12 months amidst global trade tensions and a general slowdown in global economies. Nonetheless, leasing demand for good quality Grade B office space is expected to remain healthy given the lack of quality supply and overall tight supply in the near term5, which will overall benefit China Square Central. CBRE5 similarly expects the market for city fringe business parks6 to remain healthy due to limited supply, which bodes well for Alexandra Technopark.

For Australia, the Reserve Bank of Australia expects the economy to grow by 1.75% and 2.75% in 2019 and 20207, respectively. Caroline Chisholm Centre in Canberra, which is wholly leased to the Commonwealth of Australia on a long-term lease with yearly rent escalation, will continue to provide stable income to the portfolio. 357 Collins Street in Melbourne is almost fully leased8 with minimal outstanding lease expiries in FY2020, and is therefore expected to be perform stably as well. As for Central Park, it is expected to benefit from the recent rebound in the Perth office leasing market and expectations of further rental growth in the next few years.

For the UK, the Bank of England’s Monetary Policy Committee expects the economy to grow by around 1.3% in 20199. While there are currently uncertainties with regards to the eventual outcome and impact of Brexit, we remain confident on the long-term prospects of the UK market. The performance of Farnborough Business Park is expected to remain stable given the property’s solid fundamentals and the continued attractiveness of Thames Valley as a well-established and cost-efficient location for businesses10.


Mr Chay Wai Chuen retired from the Board on 28 July 2019. Mr Chay had served as Non-Executive and Independent Director from July 2010 and was also the Chairman of the Audit, Risk and Compliance Committee from March 2011 and a member of the Nominating and Remuneration Committee from its establishment in September 2016. We would like to express our sincere appreciation for his significant and valuable contributions to the Board and wise counsel to the management team during his tenure of service.

Chairman and Independent
Non-Executive Director



Chief Executive Officer

  1. Inclusive of 50.0% interest in Farnborough Business Park which is held as a joint venture and equity-accounted.
  2. Net of distribution income and assuming distribution income for 4Q FY2019 was fully paid in cash.
  3. Peer group as defined by GRESB.
  4. Source: Ministry of Trade and Industry Singapore, 21 November 2019.
  5. Refer to Market Overview, Singapore by CBRE dated 2 December 2019 which is included in this Annual Report.
  6. Alexandra Technopark is a high-specification B1 industrial development located at the city-fringe, with certain physical attributes similar to business parks. Due to limited availability of market research information directly relating to the asset class of Alexandra Technopark, market research information for business parks is provided for indicative reference.
  7. Source: Reserve Bank of Australia’s Statement on Monetary Policy Decision, November 2019.
  8. Committed occupancy of 99.7% as at 30 September 2019.
  9. Source: Bank of England’s Monetary Policy Committee meeting held on 6 November 2019.
  10. For more information, please refer to Market Overview, Thames Valley and Farnborough Area, UK, by Jones Lang LaSalle dated 2 December 2019 which is included in this Annual Report.
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About our Manager

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

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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, Frasers Property Limited.

Executive Officers


Seated (from left to right): Ms Cheah Yoke Lan, Mr Jack Lam and Ms Tricia Yeo
Standing (from left to right): Ms Wang Mei Ling, Mr Vincent Lee, Mr Wong Soon Yean and Ms Janet Soh

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