Farnborough Business Park acquisition to strengthen FCT's income

Combined with a $79m fundraising, the accretion of FCT's DPU could reach 1-2% in 2018 to 2019.

Frasers Commercial Trust (FCT) will be on a roll after it completes its acquisition of Farnborough Business Park as distribution per unit (DPU) is set to increase in 2018, DBS Equity Research said.

Singapore Business Review previously reported that FCT, with its sponsor, Frasers Centrepoint Limited (FCL) entered a 50:50 joint venture (JV) to buy the park for $316.09m.

The acquisition has an estimated net property income (NPI) yield of estimated NPI yield of 6.3%.

According to DBS' report, should the acquisition close at February, combined with a $79m fundraising, the accretion of FCT's DPU could reach 1-2% in 2018 to 2019.

Moreover, gearing is expected to increase from 35% to 37% by the end of September 2017.

In addition, proforma NPI contribution from UK will be approximately 8%, whilst contribution from Australia and Singapore will drop to 43.3% and 48.7% from 47.1% and 52.9%, respectively. The overall WALE will also be extended to 3.8 years from 3.4 years.