The makeover and the low rental rate of $4 psf pm could lure new tenants.
Frasers Commercial Trust could get a boost from the asset enhancement initiative (AEI) of the Alexandra Technopark (ATP), DBS Equity Research said.
Amongst the outcomes of the AEI are the creation of a new amenity hub with futsal courts, end-of-trip facilities, exercise areas and meeting facilities.The lobby, lifts and toilets and the signage for the property were also improved
“The refresh, in our view, now gives the property a brighter and contemporary feel versus a “dated” design compared to other newer competing buildings in the Alexandra precinct,” DBS Equity Research noted.
ATP’s NPI from the last quarter was recorded at around$5.6m which is a slip from the $9 to $10m due to the staggered exit of the property by HP.
“The AEI was initially planned to enhance the competitive position of the property, which we believe, after seeing the works, has hit the mark with prospective tenants potentially thinking “why aren’t we here” given an enhanced product,” the research firm said.
Its city fringe location, as well as its rental rate of $4 psf pm versus the $5-7 psf pm for nearby buildings, could also lure possible tenants to the ATP, they added.
“We believe this should translate to new leases soon, with FCOT backfilling space vacated by HP resulting in committed occupancy rising from 64.8% as at 30 June 2018,” DBS Equity Research explained.
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