growth - Frasers Commercial Trust

Transcription

Laying the
Growth
foundation
Annual Report 2014
c o n t e n t s
Overview
2
45
In v e s t o r r e la t i o ns
48
A b o u t F ras e rs
c o mm e rc i al t r u s t
S u s t a i na b i l i t y r e p o r t
6
54
F i nanc i al h i g h l i g h t s
O v e r v i e w o f pr o p e r t i e s
8
56
l e t t e r t o u n i t h o l d e rs
13
c o rp o ra t e s t r u c t u r e
14
key events
18
b o ar d o f d i r e c t o rs
22
58
M ar k e t o v e R v i e w
c o rp o ra t e g o v e rnanc e
Financial
i n fo r m at i o n
81
f i nanc i al s t a t e m e n t s
60
135
u n i t h o l d e rs ’ s t a t i s t i cs
5 5 M ar k e t s t r e e t ,
s i ngap o r e
A l e x an d ra t e c h n o par k ,
S i ngap o r e
36
71
C h i na s q u ar e c e n t ral ,
s i ngap o r e
26
Portfolio review
r i s k manag e m e n t
Asset profiles
62
35
68
P o r t f o l i o d e t a i ls
manag e m e n t t e am
o p e ra t i o nal &
f i nanc i al r e v i e w
Risk management
& C o r p o r at e
governance
64
C e n t ral par k , P e r t h ,
A u s t ral i a
66
C ar o l i n e c h i s h o lm
C e n t r e , C an b e rra ,
A u s t ral i a
All values in the tables, graphs and charts are expressed in Singapore currency unless otherwise stated.
Any discrepancies in the tables, graphs and charts included in this report between the listed amounts and
total thereof are due to mathematical rounding. Where applicable, measurements in square metres (sq m)
are converted to square feet (sq ft) and vice versa based on the conversion rate of 1 sq m = 10.7639 sq ft.
138
In t e r e s t e d p e rs o n
t ransac t i o ns
139
N o t i c e o f ann u al
g e n e ral m e e t i ng
pr o x y f o rm
b u i l d i n g
a
FUTURE
Frasers
Commercial
Trust
a b o u t f r a s e r s
c o m m e r c i a l t r u s t
Frasers Commercial Trust (FCOT or the Trust) is a
real estate investment trust sponsored by Frasers
Centrepoint Limited (FCL). As at 30 September 2014,
its portfolio consists of five quality office and business
space buildings located in Singapore and Australia
with a combined appraised value of approximately
S$1.8 billion.
Listed on the main board of the Singapore Exchange
Securities Trading Limited (SGX-ST) since 30 March
2006, FCOT is managed by Frasers Centrepoint
Asset Management (Commercial) Ltd (the Manager),
a subsidiary of FCL.
FCL is a full-fledged international real estate company
and one of Singapore’s top property companies with
total assets of approximately S$17 billion as at
30 September 2014. FCL has four core businesses
focused on residential, commercial, hospitality and
industrial properties spanning over 35 cities across
Asia, Australasia, Europe and the Middle-East.
2
Central Park, Perth, Australia
annual
report
2014
o u r
v i s i o n
55 Market Street, Singapore
Alexandra Technopark, Singapore
To become a leading owner of quality commercial real
estate properties in selected countries in the AsiaPacific region, a landlord-of-choice for businesses and
a preferred investment choice among investors.
o u r
MISSION
• To build a strong and balanced portfolio of quality
commercial properties
• To deliver a stable and sustainable distribution to
our Unitholders
• To create value by enhancing and unlocking values
of our existing properties through refurbishment
and redevelopment
• To be a fair and responsible landlord adopting best
practices in governance, social responsibility and
sustainability
3
China Square Central, Singapore
SF
strong fundamentals
E s ta b l i s h i n g s u c c e s s f u l s t r at e g i e s
S$57.3
m i l l i o n
D i str i b u t a b l e i n come
to U n i tho l d ers for the
f i n a n c i a l y e a r e n d e d
3 0 septem b er 2 0 1 4
( F Y 2 0 1 4 )
Highest distributable income to
Unitholders since listing1.
8.51
C E N T S
D i str i b u t i o n
per U n i t ( D P U )
for F Y 2 0 1 4
Highest DPU since listing1 and
fifth consecutive year of DPU
growth since the completion
of the recapitalisation exercise
in 2009.
11.0%
C AGr
2
i n
D P U
Delivered long-term growth
in DPU with the effective
strategies of the Manager.
COT was listed on the main board of the SGX-ST on
F
30 March 2006.
2
Compounded annual growth rate for the last five financial
years up to FY2014.
1
4.4%
C AG R 2 i n Net
a sset v a l u e
( NA V ) per U n i t
Created long-term value for
Unitholders by growing the
NAV per Unit.
Caroline Chisholm Centre,
Canberra, Australia
Frasers
Commercial
Trust
FINANCIAL
h i g h l i g h t s
FY2010
FY2011
NPI
FY2012
FY2013
FY2014
57.3
51.4
FY2010
FY2011
43.1
36.3
34.5
90.6
88.0
90.9
85.9
102.5
99.5
93.5
Achieved highest distributable
income to Unitholders since listing2
96.0
2.4% increase in NPI on a cash basis1 in FY2014
91.1
Distributable inc o m e
to Unitho ld e rs
(S$ MILLION)
FY2012
FY2013
FY2014
NPI on a cash basis1
Achieved highest DPU since listing2
and fifth consecutive year of DPU
growth since the completion of the
recapitalisation exercise in 2009
Higher NAV per Unit of $1.59 boosted by
higher property valuation
FY2010
FY2011
1.59
FY2014
1.57
FY2013
1.34
FY2012
1.34
5.75
FY2011
6.69
5.60
FY2010
8.51
Ne t Asse t Value p e r Unit 3,4
(S$)
7.83
D i s tr i b u ti o n p e r U n i t 3
( ce nt s )
1.50
93.0
ne t p r o p e r ty i n co m e ( NPI)
( S $ MILLION )
FY2012
FY2013
FY2014
Notes
NPI excluding the effects of recognising accounting income on a straight line basis over the lease term.
FCOT was listed on the main board of the SGX-ST on 30 March 2006.
3
The number of Units used to calculate the DPU and NAV per Unit had been adjusted for the effect of the Unit consolidation on 11 February 2011.
4
Excludes distributable income.
1
2
6
annual
report
2014
y e a r - o n-ye ar c o m pariso n
Statement of total return highlights (S$ million)
FY2013
FY2014
Increase/
(Decrease)(%)
118.2
118.8
0.5
NPI
90.9
90.6
(0.3)
85.9
88.0
2.4
Distributable income to Unitholders
51.4
57.3
11.5
1,862.5
1,881.8
1.0
801.2
790.4
(1.3)
Gross revenue
Balance Sheet highlights (as at 30 September) (S$ million)
Total assets
Total liabilities
701.2
698.6
(0.4)
1,061.4
1,091.4
2.8
7.83
8.51
8.7
5.5
5.5
–
NAV per Unit (S$)
1.57
1.59
1.3
Gearing (%)
37.7
37.1
(1.6)
4.3
4.3
–
Total borrowings
Net assets
Key Financial Indicators
DPU (cents)
Distribution per Series A Convertible Perpetual Preferred Units (CPPU) (cents)
3,4
Interest cover (times)
U n i t p r i ce p e rfo rm anc e fo r FY 2014
In FY2014, FCOT Unit price registered an 8.0% increase to close at S$1.350 as at 30 September 2014. In FY2014,
market volatilities continued to be underpinned by the uncertainties over the potential increase in interest rates as
a result of the tapering of the quantitative easing programme by the United States Federal Reserve. Despite this,
FCOT’s Unit price outperformed the FTSE REIT and FTSE Small Cap Indices, which were up 1.8% and down 6.9%,
respectively.
FCOT Unit price
FTSE REIT Index
FTSE Small Cap Index
120%
4 million
FCOT
108.0%
110%
3 million
FTSE
REIT
Index
100%
101.8%
2 million
FTSE
Small Cap
Index
FCOT daily trading volume
Daily closing price as a % of closing price on 1 October 2013
Trading volume (FCOT)
93.1%
90%
1 million
80%
Oct ‘13
0
Nov ‘13 Dec ‘13 Jan ‘14
Feb ‘14 Mar ‘14 Apr ‘14 May ‘14 Jun ‘14
Jul ‘14
Aug ‘14 Sep ‘14
Source: Bloomberg
Opening price on 1 October 2013
Closing price on 30 September 2014
High price on 29 July 2014
S$1.250
S$1.350
S$1.440
Low price on 9 December 2013
Average daily traded volume
S$1.215
0.8 million
7
Frasers
Commercial
Trust
LETTER
to
u n i t h o l d e r s
From left to right: Dr Chua Yong Hai and Mr Low Chee Wah
“FY2014 was another successful
De ar Unitho ld e rs,
year for the Trust. It delivered the
On behalf of the Board of Directors of Frasers Centrepoint
Asset Management (Commercial) Ltd, the Manager of FCOT,
we are pleased to present the Annual Report for FY2014.
highest distributable income and
DPU since it was listed in 2006 and
the fifth consecutive year of DPU
Scaling ne w hig hs
growth since the recapitalisation
FY2014 was another successful year for FCOT. The Trust
ended FY2014 on a high note with a new high in distributable
income to Unitholders of S$57.3 million, up 11.5% compared
to FY2013, which was in itself a record financial year. The
DPU of 8.51 cents was also a new high and marks the fifth
consecutive year in DPU growth since the recapitalisation
exercise. These were also the highest distributable income and
DPU achieved since FCOT was listed on the SGX-ST in 2006.
Initiatives which the Manager have put in place to deliver a
sustainable growth have contributed much to these results.
exercise in 2009”
8
annual
report
2014
s$57.3
million
11.5%
Distributable income
to unitholders
8.51
cents
8.7%
Distribution per unit
s$1,824.9
million
1.8%
1
portfolio value
s$1.59
1.3%
Net asset value
per unit (Excluding
distributable income)
13.7% - 21.4%
weighted average rental
reversions achieved
in fy2014
1
Excluding effects of the weaker Australian Dollar.
Gross revenue for FY2014 of S$118.8 million was up 0.5% as
compared to FY2013, mainly driven by the higher occupancy and
rental rates achieved in China Square Central and the higher
revenue contribution from the underlying leases following the
expiry of the master lease at Alexandra Technopark. The gross
revenue for the Singapore properties was up 9.3%, although
this was offset by the weaker performances of the Australian
properties due mainly to the weaker Australian dollar.
NPI for FY2014 of S$90.6 million was marginally lower by
0.3% compared to FY2013. The weaker Australian dollar and
slightly higher expenses incurred mainly for the painting
works in Caroline Chisholm Centre led to the lower NPI in
FY2014. Excluding the recognition of accounting income
on a straight line basis over the lease term, NPI on a cash
basis for FY2014 was S$88.0 million, up 2.4% compared to
FY2013. The Singapore properties achieved a higher NPI of
8.9% year-on-year, attributed to the better performance of
China Square Central and the expiry of the master lease at
Alexandra Technopark.
To manage the impact of the weaker Australian dollar, net
anticipated cash flows from the Australian properties have
been hedged. As such, the impact of the weaker Australian
dollar was slightly mitigated by the realised gain on forward
currency contracts and lower interest expense on the
Australian dollar denominated loans.
Lower finance costs as a result of the weaker Australian
dollar and lower interest costs coupled with the savings in
Series A CPPU distributions also boosted the distributable
income to Unitholders.
H i g h e r NAV p e r U n i t b o o s t e d b y h i g h e r
va l u at i o n f o r t h e S i n g a p o r e p r o p e r t i e s
driven by higher rents in Alexandra
Te c hno park
NAV per Unit excluding distributable income, increased
from S$1.57 as at 30 September 2013 to S$1.59 as at 30
September 2014. The higher NAV per Unit was attributed to
the increase in portfolio value of S$13.5 million to S$1,824.9
million. Excluding the weaker Australian dollar, the overall
property portfolio value increased by S$33.3 million, up 1.8%
compared to a year ago. The higher valuation was mainly
driven by the Singapore properties. The Singapore properties,
which comprise 66.6% of the portfolio value, achieved a
higher valuation of 3.9%. Alexandra Technopark registered
the highest increase in valuation by 8.2%, reflecting the higher
rents from the underlying leases following the expiry of the
master lease. The valuations for China Square Central and
55 Market Street increased by 1.0% and 0.9% respectively,
benefitting from continued rental growth in the Singapore office
market. The higher valuation for the Singapore properties
was off-set by the lower valuation for Central Park due to
the weaker Australian dollar and lower rents.
9
Frasers
Commercial
Trust
LETTER
to
u n i t h o l d e r s
H e a lt h y o c c u pa n c y a n d a c t i v e l e a s i n g
act iv it ie s
As at 30 September 2014, the Trust achieved a healthy average
portfolio occupancy rate of 96.5%. The average occupancy
rates in Singapore and Australia were 97.4% and 94.9%
respectively. The portfolio has a well-diversified trade sector
mix, comprising companies from the technology, government
linked, resources, financial services and consultancy and
business services sectors, amongst others.
In FY2014, continued proactive leasing activities taken by the
Manager led to the completion of 82 new leases and renewals
across 369,149 sq ft of space, representing 16.2% of portfolio
net lettable area. The portfolio has a lease expiry profile that
is well-spread out with a weighted average lease expiry by
gross rental income of 3.92 years as at 30 September 2014.
This minimises lease renewal risks and provides a stable
income profile for the Trust. As at 30 September 2014, the
portfolio lease expiries by gross rental income did not exceed
24.5% in any one financial year.
S i n ga p o r e p r o p e r t i e s c o n t i n u e d to e n j oy
the upside in rental reversions on the back
of the positive momentum in the office
mar k e t
The properties in Singapore continued to benefit from the
positive momentum in the office market in FY2014. The uptrend
in rentals, combined with the quality, strategically located office
properties and proactive leasing initiatives, have resulted in
the strong performance in FY2014. Enhancing and unlocking
values of the existing properties through refurbishment and
redevelopment has also borne fruit in FY2014. The Trust
continues to reap the benefits of the China Square Precinct
Master Plan and the asset enhancement initiatives which
were completed in FY2013. In FY2014, the properties achieved
positive weighted average rental reversions of between 13.7%
to 21.4%3.
With the low passing rents of expiring leases in FY2015 and
the expected continuous uptrend in rentals for the Singapore
office space, the properties are well-positioned to capture
the potential upside in rentals.
Inclusive of the early reneal of the underlying leases at Alexandra
Technopark.
3
The weighted average rental reversions based on the area for new
and renewed leases which commenced in FY2014.
2
10
C o m p l e t e d t h e e a r ly r e f i n a n c i n g o f a l l
e x i s t i n g t e r m l o a n fa c i l i t i e s a n d a l l
p ro p e rtie s are now une nc um be re d
In September 2014, early refinancing of all the bank borrowings
of the Trust with new unsecured facilities of between 3 to 5
years was completed. All the properties of the Trust are now
unencumbered and this improves the financial flexibility of the
Trust. As a result of the early refinancing, the Trust does not
have any refinancing requirement until FY2017. The weighted
average debt maturity profile was extended to 4.3 years as
at 30 September 2014. The interest coverage ratio remained
healthy at 4.3 times and the average cost of debt was 2.7% in
FY2014. With a well-spread debt maturity profile, the Trust
has a stronger financial structure.
Savings from net redemption and conversion
o f S e r i e s A CPPU s b o o s t e d d i s t r i b u ta b l e
inc o m e in FY 2014
In FY2014, 0.1 million Series A CPPUs were redeemed by
the Trust and 12.0 million Series A CPPUs were converted
into new Units by the relevant Series A CPPU holders. The
remaining 0.08 million Series A CPPUs were converted into
new Units by the Series A CPPU holders on 1 October 2014.
Following the completion of the conversion of the Series A
CPPUs on 1 October 2014, there are no longer any Series A
CPPUs outstanding. Savings in Series A CPPU distributions
arising from both the redemption and conversion of Series
A CPPUs, coupled with the lower finance costs, boosted the
distributable income to Unitholders.
E x p i r y o f m a s t e r l e a s e at A l e x a n d r a
T e c h n o pa r k w i l l d r i v e f u r t h e r g r o w t h
fo r the Trust
On 25 August 2014, the master lease with Orrick Investments
Pte Ltd (Orrick) at Alexandra Technopark expired and was not
renewed. Following the expiry, the underlying multi-tenant
leases continued to subsist directly with the Trust which now
receives rents directly from the underlying tenants, instead of a
fixed master lease rent from Orrick. This provides an immediate
income uplift as the underlying rents are significantly higher
as compared to the fixed master lease rent. In addition, with
the low passing rents of expiring leases in the coming financial
year, the Trust is now able to capture potential increases in
rentals as and when the underlying leases expire and are
renewed. Hence, the expiry of the master lease will drive
further growth in future NPI and DPU for the Trust.
annual
report
2014
Moody’s assigned Baa3 Issuer Rating to FCOT
In November 2014, Moody’s assigned a Baa3 issuer rating to
FCOT with a stable outlook, following the withdrawal of its Baa3
corporate family rating. The Baa3 issuer rating was assigned
following Moody’s decision to no longer reflect subordination
in FCOT’s rating after FCOT refinanced all its secured with
unsecured term loan facilities. The stable outlook reflects
Moody’s expectation that the properties of FCOT will continue
to generate stable income, driven by steady occupancy levels
and organic growth from positive rental reversions.
FCOT win s p r e s ti g i o u s awa r d i n co r p o rate
governance for the second consecutive
y e ar
For the second consecutive year, FCOT was conferred the
runner-up in the Singapore Corporate Governance Award under
the REITs and Business Trusts category at the 15th Securities
Investors Association (Singapore) (SIAS) Investors’ Choice
Award 2014. Winning this award for the second consecutive
year is a testament of the investment community’s confidence
in FCOT and its commitment to continue upholding high
standards of corporate governance practices.
The Trust is also a signatory to the 2014 Corporate Governance
Statement of Support organised by SIAS where the Trust
has pledged its commitment to uphold high standards in
corporate governance.
Caroline Chisholm Centre, Canberra, Australia
11
Frasers
Commercial
Trust
LETTER
TO
UNITHOLDERS
Dist r ib u t io n R e i n v e s tm e n t P la n ( DRP)
Ac knowle d g e m e nts
The Trust established and implemented the DRP for
distributions declared in FY2014. The DRP enables Unitholders
to increase their participation in the Trust without incurring
transaction or other related costs, whilst cash retained will
enlarge the Trust’s capital base, strengthen its working capital
reserves and improve the liquidity of the Units.
The record year of performance is a testament of the
commitment, experience and strength of the management
and staff of the Manager. On behalf of the Board, we would like
to thank them for their contributions. We would also like to
thank our Unitholders, Trustee, bankers, tenants and partners
for their continued support as we continue growing. We look
forward to meeting our Unitholders at the upcoming Annual
General Meeting to be held on 22 January 2015.
L ay i n g t h e g r o w t h fo u n d at i o n to b u i l d a
gr e at e r fu t u r e
While the Singapore and Australia economies are expected to
grow at modest paces, the future growth of the Trust remains
supported by the strong foundation laid by the Manager. With
the limited supply in office space in Singapore in the coming
year, office rentals are expected to continue growing. The
Trust is expected to benefit from this uptrend given the low
passing rents of expiring leases in the properties in FY2015.
Similarly, following the expiry of the master lease, there will
be a significant uplift in income for Alexandra Technopark. The
property is poised to capture the potential upside in rentals
given the lack of new supply of independent high-specs space
in the Alexandra Precinct area and the low passing rents of
expiring underlying leases in FY2015.
The Manager will continue to proactively manage and drive
the performance of the portfolio and seek yield accretive
opportunities in our core markets. The Manager will also
continue with its prudent capital management strategies
including managing interest rates and foreign exchange rate
exposures to reduce financial risks.
12
Dr c hua yo ng hai
Chairman and Independent Non-Executive Director
Low c he e wah
Chief Executive Officer and Executive Director
annual
report
2014
C o r p o r at e
STRUCTURE
t r us t ee
UNITHOLDERs
British and
Malayan Trustees Limited
Distributions
Holding of Units
Trustee fees
Acts on behalf
of Unitholders
Ownership
of assets
Management
fees
M an ag e r
Frasers Centrepoint
Asset Management
(Commercial) Ltd.
Management
services
Net property
income
Property
management
fees
P r oper t ies
Property
management
services
P r o p e r ty M a n ag e r
Frasers Centrepoint
Property Management
(Commercial) Pte. Ltd.
Singap o re
• China Square Central
• 55 Market Street
• Alexandra Technopark
Australia
• Central Park*, Perth
• Caroline Chisholm
Centre, Canberra
* Represents FCOT’s 50.0% indirect interest in the asset
13
Frasers
Commercial
Trust
KEY
Fifth Annual General
Meeting was held on 22
January 2014 and all resolutions
proposed were duly passed.
Distribution of 2.0483 cents
per Unit was declared for the
financial period from 1 October
2013 to 31 December 2013, up
29.4% year-on-year.
Series A CPPU distribution
of 1.3712 cents per Series
A CPPU was declared for the
financial period from 1 April 2014
to 30 June 2014.
june 2014
march 2014
financial period from 1 January
2014 to 31 March 2014.
1,879,377 new Units were
allotted and issued pursuant
to the DRP for the distribution
declared for the financial period
from 1 January 2014 to 31 March
2014.
may 2014
Established the DRP, which
w a s i m p le m e n t e d fo r t h e
distribution declared for the
2013 to 31 December 2013.
declared for the financial
period from 1 October 2013 to
31 December 2013.
financial period from 1 January
2014 to 31 March 2014, up 3.2%
year-on-year and the DRP was
implemented.
Appointment of Mr Piya
Treruangrachada as Joint
Company Secretary.
February 2014
14
december 2013
2013 to 31 December 2013.
November 2013
FCOT w a s n a m e d t h e
runner-up in the Singapore
Co r po r at e G ove r n a n ce
Aw a r d u n d e r t h e R E I Ts
and Business Trusts category at
the 14th SIAS Investors’ Choice
Award 2013.
45,133 new Units were issued
pursuant to the successful
conversion of 53,465 Series A
CPPUs by the relevant Series A
CPPU holders in March 2014.
april 2014
695,243 new Units were
issued pursuant to the successful
conversion of 823,544 Series A
CPPUs by the relevant Series A
CPPU holders in December 2013.
january 2014
financial period from 1 July 2013
to 30 September 2013, up 18.9%
year-on-year.
October 2013
issued pursuant to the successful
conversion of 11,101,787 Series
A CPPUs by the relevant Series A
CPPU holders in September 2013.
EVENTS
Cessation of Mr Anthony
Cheong Fook Seng as Company
Secretary.
annual
report
2014
j u ly 2 0 1 4
97,729 Series A CPPUs were
r e d e e m e d i n ca s h a n d
cancelled pursuant to the
successful redemption of Series
A CPPUs by the Manager in June
2014.
august 2014
declared for the financial period
from 1 April 2014 to 30 June 2014.
financial period from 1 July 2014
to 30 September 2014.
THE REMAINING 80,750 SERIES
A CPPUs HAD BEEN CONVERTED
INTO NEW UNITS by the relevant
Series A CPPU holders following
the exercise of the conversion
rights in September 2014.
Following the conversion in
October 2014, there are no longer
any Series A CPPUs outstanding.
september 2014
distribution of 2.1911 cents
per Unit was declared for
the financial period from 1 April
2014 to 30 June 2014, up 0.3%
year-on-year and the DRP was
implemented.
Expiry of master lease at
Alexandra Technopark
with Orrick Investments Pte
Ltd. Following the expiry, the
underlying multi-tenant leases
continued to subsist directly with
the Trust.
The property manager
of Central Park won the
Commercial Office Manager
of the Year at the Property
Council of Australia’s 2014 Western
Australia Property Awards.
C o m p l e t e d t h e e a r ly
refinancing of all existing
term loan facilities on an
unsecured basis and all the
properties of FCOT have been
unencumbered.
15
GD
Growing distribution
c r y s ta l i s i n g e f f e ct i v e s t r at e g i e s
S i g n i f i c a n t
i n come u p l i ft
After the exp i r y of
the m a ster l e a se a t
A l ex a n d r a T ech n op a rk
Following the expiry of the master lease with Orrick
Investments Pte Ltd on 25 August 2014, the underlying
multi-tenant leases at Alexandra Technopark continued
to subsist directly with the Trust. The expiry of the
master lease provides an immediate income uplift
as the Trust receives underlying rents which are
significantly higher as compared to the fixed master
lease rent. The Trust is also able to capture potential
increases in rentals as and when the underlying leases
expire and are renewed.
13.7% - 21.4%
1
P os i t i ve we i g hte d a ver a g e
re n t a l revers i o n s a ch i eve d
i n F Y 2 0 1 4
The good quality and strategically located properties continued
to enjoy positive rental reversions on the back of the uptrend
in the Singapore office market and proactive leasing initiatives.
China Square Central continues to reap the benefits of the
China Square Precinct Master Plan and the asset enhancement
initiatives which were completed a year ago. The low passing
rents of expiring leases in the coming financial year will continue
to drive future income growth.
The weighted average rental reversions based on the area for new and renewed leases which commenced
in FY2014.
1
Frasers
Commercial
Trust
BOARD
OF
DIRECTORS
DR CHUA YONG HAI , 7 0
M r LOW CHEE WAH , 4 9
C h a i rm a n , N O N - E X E C U T I V E
AND IND E P E ND E N T DI R E C T O R
E xec u t i ve a n d
n o n - i n d epe n d e n t D i rector
Date of appointment as Director
27 February 2006
14 August 2008
Length of service as Director (as at 30 September 2014)
8 years 08 months
6 years 02 months
Board committee served on
• Audit, Risk and Compliance Committee
Nil
Academic & Professional Qualifications
• Bachelor of Science (Honours), University of Singapore
• Graduate Diploma in Business Administration, University
of Singapore
• PhD in Chemical Engineering from the University of New
South Wales
• Qualified Chemical Engineer
Present Directorships as at 30 September 2014
Listed companies
• Cambridge Industrial Trust Management Limited, the
Manager of Cambridge Industrial Trust (Chairman)
• Chiwayland International Limited (formerly known as R H
Energy Ltd.)
Others
• Lend Lease Asian Retail Investment Funds (No 1-5) Limited
• Singapore Cooperation Enterprise
• Bachelor of Economics, Monash University
• Bachelor of Laws, Monash University
• Fellow of CPA Australia
Listed companies
Nil
Others
• Dover Park Hospice (Council Member)
Major appointments (other than Directorships)
• C hief Executive Officer, Frasers Centrepoint Asset
Management (Commercial) Ltd
• Singapore’s Non-resident High Commissioner to the Maldives
• Justice of Peace
Past Directorships in listed companies held over
the preceding 3 years (from 01 October 2011 to
30 September 2014)
Nil
30 September 2014)
• Sakari Resources Limited
Others
• Previously Chief Executive Officer of BNP Paribas Peregrine
(Singapore) Ltd, investment banking arm of BNP Paribas
Singapore
Others
• Previously General Manager of Temasek Holdings Pte
Limited
• Previously Managing Director and Chief Executive of United
Engineers Limited
• P reviously Group General Manager of Suntec City
Development Private Limited
• Singapore Government Scholar
• Australian Commonwealth Fellowship
• Public Service Medal (PBM) and Public Service Star (BBM)
18
annual
report
2014
Mr chay wai chuen, 64
Mr chia khong shoong, 43
NON-EXECUTIVE and
IND E P E ND E N T DI R E C T O R
non-EXECUTIVE and
N O N - IND E P E ND E N T DI R E C T O R
29 July 2010
01 September 2009
4 years 03 months
5 years 01 month
• Audit, Risk and Compliance Committee (Chairman)
Nil
• Bachelor of Arts, University of Singapore
• Bachelor of Social Science (Honours), University of Singapore
• Master of Social Science, University of Singapore
• Master of Arts, University of Sussex
• Graduate of the Singapore Command and Staff College
• Advanced Management Program, Harvard Business School
• Bachelor of Commerce (Accounting and Finance)
(First Class Honours), University of Western Australia
• Master of Philosophy (Management Studies), Cambridge
University
Listed companies
Nil
Others
• Singapore Corporation of Rehabilitative Enterprises (SCORE)
• Chairman of Investment and Finance Committee (SCORE)
• Singapore’s Ambassador to the Slovak Republic
30 September 2014)
Nil
Others
• Previously Member of Parliament in Singapore
• Previously Member of the Public Accounts Committee of
Parliament
• Previously Chairman of the Government Parliamentary
Committee in Transport
•P
reviously Chairman of the Tanjong Pagar Town Council
•P
reviously Chief Financial Officer and Director for Supply
Chain, NTUC Fairprice Cooperative Ltd.
•P
reviously Singapore’s non-resident High Commissioner
to Sri Lanka
Listed companies
Nil
Others
• Frasers Centrepoint Asset Management Ltd, the Manager
of Frasers Centrepoint Trust
• Frasers Centrepoint Limited (Chief Financial Officer)
30 September 2014)
• Gemdale Properties and Investment Corporation Limited
Others
• Previously, Director, Investment Banking, The Hongkong
& Shanghai Banking Corpn Ltd
19
Frasers
Commercial
Trust
BOARD
OF
DIRECTORS
mr lim ee seng, 63
m r ta n g u o n g c h i n g , 6 8
N O N - E X E C U T I V E a n d n o n - IND E P E ND E N T DI R E C T O R
non-eXECUTIVE and
IND E P E ND E N T DI R E C T O R
14 August 2008
27 February 2006
6 years 02 months
8 years 08 months
Nil
• Bachelor of Engineering (Civil Engineering), University of
Singapore
• Master of Science (Project Management), National University
of Singapore
• Fellow, Singapore Institute of Directors
• Member, The Institution of Engineers Singapore
Listed companies
Nil
Others
• Frasers Hospitality Trust Management Pte Ltd
• Frasers Hospitality Asset Management Pte Ltd, the Manager
of Frasers Hospitality Trust
• Frasers Australand Pty Ltd
• Australand Holdings Limited
• Australand Property Limited
• Australand Investments Limited
• Frasers Centrepoint Limited (Group Chief Executive Officer)
• Real Estate Development Association of Singapore (2nd
Vice-President)
30 September 2014)
Others
• Previously Board Member of the Building and Construction
Authority of Singapore
• Previously Council Member of the Singapore Chinese
Chamber of Commerce and Industry
• Previously Managing Director of MCL Land Limited
• Previously General Manager of the property division of First
Capital Corporation Ltd
• Awarded Public Service Medal, Singapore
20
• Bachelor of Engineering (Dean’s Honours), McMaster
University, Canada
• Master of Engineering, McMaster University, Canada
• Advanced Management Programme, Wharton University
Listed companies
• StarHub Limited (Chairman)
• Cambridge Industrial Trust Management Limited, the
Manager of Cambridge Industrial Trust
• Singapore Shipping Corporation Limited
Others
• Singapore Technologies Telemedia Pte Ltd (Chairman)
• STT Communications Ltd (Chairman)
• Asia Mobile Holdings Pte Ltd (Chairman)
• Singapore Technologies Aerospace Ltd (Chairman)
• Singapore Millennium Foundation Ltd
Nil
30 September 2014)
• Pteris Global Limited
Others
• P reviously Chief Executive Officer of the Housing &
Development Board
• P reviously the Principal Private Secretary to the
Prime Minister
• Previously the Permanent Secretary of the Ministry of Home
Affairs, Ministry of the Environment and the then Ministry
of Communications & Information
• Previously Director of Singapore Pools Pte. Ltd.
annual
report
2014
m r c h r i s t o p h e r ta n g k o k k a i , 5 3
No n - exec u t i ve a n d
n o n - i n d epe n d e n t D i rector
14 August 2008
6 years 02 months
• Bachelor of Science, National University of Singapore
• Master of Business Administration, National University of
Singapore
Listed companies
Nil
Others
• Hektar Asset Management Sdn Bhd, the Manager of Hektar
REIT
• Republic Polytechnic (Member of Board of Governors)
• Real Estate Investment Trust Association of Singapore
(Member of Executive Committee)
• Frasers Centrepoint Commercial, Frasers Centrepoint
Limited (Chief Executive Officer)
• Frasers Centrepoint Limited - Greater China (Chief Executive
Officer)
30 September 2014)
Others
• P reviously Chief Executive Officer of Frasers
Centrepoint Asset Management Ltd, the Manager of Frasers
Centrepoint Trust. He had previously worked with DBS Bank,
DBS Land and British Petroleum.
21
Frasers
Commercial
Trust
MANAGEMENT
TEAM
From left to right: M
s Wang Mei Ling, Ms Cheah Yoke Lan, Mr Low Chee Wah, Mr Wong Soon Yean, Ms Kelly Tan Hwee Soon
and Ms Chew Chiu Shan
MR LOW CHEE WAH
CHIEF EXECUTIVE OFFICER
Mr Low Chee Wah works with the Board to determine the
overall business and investment strategies of FCOT and is
responsible for the day-to-day management of FCOT. Mr Low
also works closely with the management team to ensure that
FCOT’s finance, investment and asset management strategies
are executed integrally and successfully.
spanning across different real estate asset classes, including
retail, industrial, office and residential developments. Prior to
joining the Manager, he was with a listed company covering
property investments, asset management and business
development in Singapore and Malaysia.
He holds a Bachelor of Science (Honours) in Estate Management
from the National University of Singapore and an Executive
Master of Science in Finance from the Zicklin School of
Business, Baruch College, City University of New York.
Please refer to the Board of Directors section for details of
Mr Low’s profile.
Ms chew chiu shan
MR WONG SOON YEAN
A S S I S T AN T G E N E R AL M ANAG E R , IN V E S T M E N T S
Mr Wong Soon Yean works closely with the CEO to formulate
and implement investment strategies for FCOT. He is
responsible for identifying, evaluating and recommending
potential acquisitions and divestments, including structuring
and executing transactions to ensure that the investment
strategies are well implemented.
Mr Wong has more than 23 years of experience in investment,
development, property management, leasing and sales
22
F i n a n c i a l co n tro l l er
Ms Chew Chiu Shan is responsible for overseeing all aspects of
finance, taxation and treasury functions and provides support
for compliance matters of FCOT.
Ms Chew, who graduated from the Nanyang Technological
University of Singapore with a Bachelor of Accountancy
degree, has over 15 years of experience. She is a Singapore
Chartered Accountant with the Institute of Singapore Chartered
Accountants. Prior to joining the Manager, she was a Senior
Audit Manager with a Big Four accounting firm.
annual
report
2014
M s CHEAH YOKE LA n
MS WANG MEI LING
S E NI O R M ANAG E R , A S S E T M ANAG E M E N T
se n i or M ANAG E R , IN V E S T O R R E LA T I O N S
Ms Cheah Yoke Lan is responsible for the active asset
management of the properties in Australia and the
implementation of the business plans. She works closely with the
respective property managers to enhance the performance of
these assets.
Ms Wang Mei Ling is responsible for investor relations activities
of FCOT. She focuses on maintaining communication and
relationship with Unitholders, investors and media.
She has more than 22 years of valuation and asset management
experience. Ms Cheah holds a Bachelor of Property
Management (Honours) from University Technology, Malaysia
and a Masters in Business Administration from Heriot Watt
University, United Kingdom.
She is a British Council Scholar and holds both a property
management, valuation and estate agent’s licence issued by
the Board of Valuers, Appraisers and Estate Agents, Malaysia.
Ms Wang graduated from the University of Manchester,
United Kingdom with a Bachelor of Arts in Economic and
Social Studies (Accounting & Finance). She is a member of
the Institute of Chartered Accountants in England and Wales.
She has more than 12 years of banking, asset management
and auditing experience. Prior to joining the Manager, she
was in fund and alternative asset management. She was also
previously an investment banker and an auditor with a Big
Four accounting firm.
MS KELLY TAN HWEE SOON
S E NI O R M ANAG E R , A S S E T M ANAG E M E N T
Ms Kelly Tan is responsible for the active asset management
of the properties in Singapore. She develops and implements
asset management strategies and plans for the Singapore
properties.
Ms Tan has more than 22 years of experience in areas of
leasing and management of office, industrial and retail
properties. Prior to joining the Manager, she was the Centre
Manager for Anchorpoint, where she was involved in the asset
enhancement of the property.
She was also previously the Senior Asset Manager with
Ascendas Land Singapore Ltd where she managed various
property assets and also a Leasing Manager with Capitaland
Commercial Ltd, covering office and industrial leasing. Ms
Tan holds a Bachelor of Science (Economics) with 2nd Upper
Class Honours from the University of London, a Diploma in
Marketing from the Chartered Institute of Marketing and a
Masters in Social Science (Counselling) from the University
of South Australia.
23
Enhancing value
C r e at i n g S u s ta i n a b l e G r o w t h
No ref i n a n c i n g
req u i re d u n t i l
F Y 2 0 1 7
C omp l ete d
ref i n a n c i
the b a n k b
of the
the e a r l y
n g of a l l
orrow i n g s
T r u st
In FY2014, the Manager completed the
early refinancing of all the bank borrowings
of the Trust with new unsecured facilities of
between 3 to 5 years. All the properties of
the Trust had been unencumbered and this
improves the financial flexibility of the Trust.
The weighted average debt maturity profile
had been extended and the interest coverage
ratio has remained healthy.
20.1
1.0
4.3
100.0
Caroline Chisholm Centre, Canberra, Australia
Before
After
Before
After
refinancing refinancing refinancing refinancing
Weighted average
debt maturity AS
AT 30 September
2014 (years)
Unencumbered
assets ratio AS
AT 30 September
2014 (%)
Grow i n g the
portfo l i o
Grow i n g the
portfo l i o thro u g h
or g a n i c a n d
i n or g a n i c me a n s
The Mad Poet Gastrobar, retail tenant at
The Manager will continue to create value with
its proactive asset management initiatives and
seek yield accretive opportunities in its core
markets of Singapore and Australia.
Frasers
Commercial
Trust
O p e r at i o n a l
&
FINANCIAL
“FY2014 was another successful
year for the Trust where it achieved
new highs in distributable income to
Unitholders and DPU. FY2014 marks
the highest DPU achieved since
listing1 and the fifth consecutive
year of DPU growth since the
completion of the recapitalisation
exercise in 2009. This is in line with
the Manager’s mission to deliver a
stable and sustainable distribution
to the Unitholders”
Financial
Highlights
(S$ million)
FY2013 FY2014
Increase/
(decrease)
(%)
Gross revenue
118.2
118.8
0.5
Property operating
expenses
(27.3)
(28.2)
3.3
NPI
90.9
90.6
(0.3)
85.9
88.0
2.4
Distributable income
to Unitholders
51.4
57.3
11.5
REVIEW
The Trust delivered another year of good performance and
ended FY2014 on a high note, with new highs in distributable
income to Unitholders and DPU. The good performance was
mainly driven by the properties in Singapore which continued
to benefit from the positive momentum in the Singapore
office market and the expiry of the master lease at Alexandra
Technopark on 25 August 2014. In addition, China Square
Central continues to reap the benefits from the positive
effects of the China Square Precinct Master Plan and asset
enhancement initiatives which were completed a year ago.
Gross revenue for FY2014 of S$118.8 million was up 0.5% as
compared to FY2013, mainly driven by the higher occupancy and
rental rates achieved in China Square Central and the higher
revenue contribution from the underlying leases following the
expiry of the master lease at Alexandra Technopark. The gross
revenue for the Singapore properties was up 9.3%, although
this was offset by the weaker performances of the Australian
properties mainly due to the weaker Australian dollar.
NPI for FY2014 of S$90.6 million was marginally lower by
0.3% compared to FY2013. The weaker Australian dollar and
slightly higher expenses incurred mainly for the painting
works in Caroline Chisholm Centre led to the lower NPI in
FY2014. Excluding the recognition of accounting income
on a straight line basis over the lease term, NPI on a cash
basis for FY2014 was S$88.0 million, up 2.4% compared to
FY2013. The Singapore properties achieved a higher NPI of
8.9% year-on-year, attributed to the better performance of
1
2
FCOT was listed on the main board of the SGX-ST on 30 March 2006.
NPI excluding the effects of recognising accounting income on a straight
line basis over the lease term.
N e t P r o p e r ty i nc o m e by p ro p e rty (S$m illio n)
Total: S$90.6 million FY2014
Singapore: S$46.6 million (51.4%)
Australia: S$44.0 million (48.6%)
Portfolio
FY2013
26
China Square
Central
FY2014
55 Market Street
Alexandra
Technopark
Central Park
9.3%
19.5
7.2%
Weaker Australian
dollar and painting
works undertaken
21.5
Weaker
Australian
dollar
24.5
22.6
21.3
3.7
6.1%
3.6
14.0%
17.8
90.9*
90.6
Higher
rentals and
occupancy
Higher contribution
from underlying
leases following
the expiry of the
master lease
20.3
2.4%
2
26.4
NPI increased
on a cash basis2,
despite the weaker
Australian dollar
Caroline Chisholm
Centre
* Includes the Japanese properties which were divested on 25 October 2012.
annual
report
2014
China Square Central and the higher contribution from the
underlying tenants following the expiry of the master lease
at Alexandra Technopark.
To manage the impact of the weaker Australian dollar, net
anticipated cash flows from the Australian properties have been
hedged. As such, the impact of the weaker Australian dollar
was slightly mitigated by the realised gain on forward currency
contracts and lower interest expense on the Australian dollar
denominated loans.
Finance cost was 4.4% lower in FY2014 as a result of the
weaker Australian dollar and lower interest costs. The lower
finance cost coupled with the savings in Series A CPPU
distributions arising from the redemption and conversion
of Series A CPPUs, also boosted the distributable income to
Unitholders in FY2014.
1.8%
Portfolio value (excluding
effects of the weaker
Australian dollar)
1.3%
“The higher NAV per Unit was boosted by
the increase in valuation for the Singapore
properties mainly driven by higher rents in
NAV per Unit (excluding
distributable income)
Alexandra Technopark”
Ne t asse t valu e a n d a p p r a i s e d p o r t fo lio valuatio n
Property
Appraised values as at
30 September 2014
(S$ million)
Variance from 30 September 2013
(S$ million)
(%)
6.0
1.0
China Square Central
579.0
55 Market Street
134.2
1.2
0.9
503.0
38.0
8.2
Central Park
375.5
(32.5)
(8.0)
Caroline Chisholm Centre
233.2
0.8
0.3
1,824.9
13.5
0.7
Total
27
Frasers
Commercial
Trust
&
FINANCIAL
REVIEW
Following an independent portfolio valuation commissioned
by the Trust, on 30 September 2014, FCOT’s overall property
portfolio value increased by S$13.5 million or 0.7% year-onyear, to S$1,824.9 million. Excluding the weaker Australian
dollar, the overall property portfolio value increased by S$33.3
million, up 1.8% year-on-year.
The higher valuation was mainly driven by the Singapore
properties. The Singapore properties, which comprise 66.6%
of the portfolio value, achieved a higher valuation of 3.9%.
Alexandra Technopark registered the highest increase
in valuation by 8.2%, reflecting the higher rents from the
underlying leases following the expiry of the master lease.
The valuations for China Square Central and 55 Market Street
increased by 1.0% and 0.9%, respectively, benefitting from
continued rental growth in the Singapore office market. The
higher valuation for the Singapore properties was off-set by
the lower valuation for Central Park, mainly due to the weaker
Australian dollar and lower rents.
As a result of the higher portfolio valuation, NAV per Unit
(excluding distributable income) increased from S$1.57 as
at 30 September 2013 to S$1.59 as at 30 September 2014.
“The Trust has a healthy average
portfolio occupancy rate of 96.5%
as at 30 September 2014”
97.9
96.5
100.0
100.0
93.5
88.6
96.9c
100.0b
100.0a
100.0
93.5
98.8
P o r tfo li o o ccu pa n cy rate s as at 30 Se p te m be r 2014 (%)
China Square
Central
55 Market Street
Alexandra
Technopark
30 September 2013
a
b
c
Central Park
Caroline Chisholm
Centre
30 September 2014
Based on the committed occupancy as at 30 September 2014.
Based on the master lease at Alexandra Technopark.
Based on the underlying leases of Alexandra Technopark. On 25 August 2014, the master lease with Orrick expired.
28
Average portfolio
occupancy rate
annual
report
2014
He alt hy po r tfo li o o ccu pa n cy r ate
As at 30 September 2014, the Trust achieved a healthy average
portfolio occupancy rate of 96.5%, a marginal decline as
compared to 97.9% as at 30 September 2013. The average
occupancy rate in Singapore decreased marginally to 97.4%
from 98.4% a year ago, as the average occupancy rate as
at 30 September 2013 was based on the master lease at
Alexandra Technopark. Based on the underlying occupancy
at Alexandra Technopark, the average occupancy rate in
Singapore was 96.6% as at 30 September 2013. Hence, the
average occupancy rate in Singapore as at 30 September 2014
improved compared to a year ago, based on the underlying
occupancy at Alexandra Technopark. The average occupancy
rate for the Australia properties declined from 97.1% to 94.9%.
As at 30 September 2014, the portfolio weighted average
lease expiries by gross rental income was a healthy 3.93 years.
Besides rental reversions, the portfolio also has built-in rent
reviews which provide organic growth for the Trust. The rent
reviews include fixed rent increases during the lease period,
or rent adjustments for inflation or market reviews. These
mechanisms for rent adjustments for inflation or market
reviews provide a hedge against costs increases and inflation.
In FY2015, 34.5% of the portfolio gross rental income has
a fixed weighted average rent increase of between 2.9% to
5.3%5 per annum, whereas 5.6% of the portfolio gross rental
income has rent adjustments for inflation and market reviews.
“The properties in Singapore will
continue to benefit from the
positive momentum in the office
market”
13.7%
Positive momentum in the Singapore office
market will continue to drive positive
r e n tal r e v e rs i o n s
The properties in Singapore continued to benefit from the
positive momentum in the office market in FY2014. The
uptrend in rentals, combined with the quality, strategically
located office properties and proactive leasing initiatives, have
resulted in the strong performance in FY2014. In addition,
China Square Central continues to reap the benefits from the
positive effects of the China Square Precinct Master Plan and
asset enhancement initiatives which were completed a year
ago. In FY2014, the properties of the Trust achieved positive
weighted average rental reversions of between 13.7% to 21.4%4.
21.4%
to
Weighted average rental reversions
achieved in FY2014
Inclusive of the early renewal of underlying leases at Alexandra Technopark.
The weighted average rental reversions based on the area for new and
renewed leases which commenced in FY2014.
5
The weighted average rent increase based on the gross rental income
for leases which are subject to fixed rent increases.
3
4
&SONS Bacaro, retail tenant at China Square Central, Singapore
29
Frasers
Commercial
Trust
&
FINANCIAL
REVIEW
0.7
Average passing rents for expiring leases
(per sq ft per month/per sq m per annum)b
4.8
Number of leases expiring
0.9
4.0
13.2
18.0a
P r o p e r ty le a s e e x p i r y i n FY 2015 as a p ro p o rtio n o f total p o rtfo lio
g r o ss re ntal inc o m e (%)
CHINA SQUARE
CENTRAL
55 MARKET
STREET
ALEXANDRA
TECHNOPARK
CENTRAL
PARK
11 (office)
26 (retail)
5
14
5
S$6.6 (office)
S$5.6 (retail)
S$6.5
S$3.2
A$610.0
As at 30 September 2014. Excludes retail turnover rent.
a
The lease expiry as a proportion of total portfolio gross rental income reduced from 18.0% to 4.8% after the early renewal of the underlying leases
expiring in FY2015.
b
Average passing rents are stated as per sq ft per month for the properties in Singapore and per sq m per annum for Central Park.
The properties in singapore are well-positioned
to capture potential rental upside
As at 30 September 2014, 23.6% of the total portfolio
gross rental income has leases expiring in FY2015. This
comprises China Square Central (4.0%), 55 Market Street
(0.9%), Alexandra Technopark (18.0%) and Central Park
(0.7%). The total portfolio gross rental income with leases
expiring in FY2015 at Alexandra Technopark reduced from
18.0% to 4.8% after the early renewal of the underlying
leases at Alexandra Technopark. Hence, with the early
renewal, the total portfolio gross rental income with
leases expiring in FY2015 reduced from 23.6% to 10.4%.
With the low passing rents of expiring leases in FY2015,
the properties in Singapore are well-positioned to capture
the potential rental upside with the expected continuous
uptrend in the Singapore office market. Similarly, with
the low passing rents of expiring leases in FY2015,
Alexandra Technopark is also poised to benefit from the
potential upside in rentals given the lack of new supply of
independent high-specs space near the property.
30
annual
report
2014
E x p i r y o f m a s t e r l e a s e at A l e x a n d r a
Te c hn o par k w i ll dr i v e f u r th e r g r owth in
fu t u r e NPI an d DPU
On 25 August 2014, the master lease with Orrick at
Alexandra Technopark expired and was not renewed.
Following the expiry, the underlying multi-tenant leases
continued to subsist directly with the Trust and the Trust
receives rents directly from the underlying tenants,
instead of a fixed master lease rent from Orrick. This
provides an immediate income uplift as the underlying
rents are significantly higher as compared to the fixed
master lease rent. In addition, with the low passing
rents of expiring leases, the Trust is now able to capture
potential increases in rentals as and when the underlying
leases expire and are renewed. Hence, the expiry of the
master lease will drive further growth in future NPI and
DPU for the Trust.
Le asin g data
Renewal/new leases data
fy2013 (based on
the master
lease)1
fy2013 (based on
the underlying
leases)2
fy2014 (based on
the underlying
leases)3
82
100
82
275,179
468,404
369,149
12.1%
20.5%
16.2%
fy2013 (based on
the master
lease)1
fy2013 (based on
the underlying
leases)2
fy2014 (based on
the underlying
leases)3
28
31
29
709,552
744,248
745,958
3.9%
4.6%
3.8%
Number of renewal/new leases
NLA leased (sq ft)
Percentage of total NLA
Fixed/inflation adjusted/
market reviews data
Number of fixed/inflation adjusted/
market reviews
NLA subject to reviews (sq ft)
Average rent increase
Based on the master lease at Alexandra Technopark.
On a see-through basis on Alexandra Technopark’s underlying leases.
3
Based on the underlying leases at Alexandra Technopark. On 25 August 2014, the master lease with Orrick expired and was not renewed.
1
2
Act iv e l e asin g acti vi ti e s
In FY2014, 745,958 sq ft of space was subject to fixed, inflation
adjusted and market rent reviews.
The highlights of another active year in our leasing activities
were:
• Completed 82 new leases and renewals across 369,149 sq
ft securing S$21.5 million rental per annum; and
• Secured 35 new leases generating S$5.7 million rental
per annum.
Top ten blue-chip tenants with long leases
c o n t r i b u t e d 4 6 . 4 % o f tota l g r o s s r e n ta l
The top ten blue-chip tenants with long leases accounted
for 46.4% of the Trust’s total gross rental income in FY2014,
ensuring a high level of secured income. The portfolio is
anchored by the lease with the Commonwealth Government of
Australia, represented by the Department of Human Services
at Caroline Chisholm Centre, with a weighted average lease
expiry of 10.8 years as at 30 September 2014. Blue-chip
tenants with long leases provide stability and security to the
portfolio income stream.
31
Frasers
Commercial
Trust
&
FINANCIAL
REVIEW
“The Manager has completed the early refinancing of all
existing term loan facilities and all properties have been
unencumbered”
Proact iv e Cap i ta l a n d F i n a n ci a l M a n ag e m e nt
Gross borrowings
FY2013
Fy2014
Increase/
decrease (%)
S$701.2 million
S$698.6 million
(0.4)
37.7%
37.1%
(1.6)
Gearing
3.0%
2.7%
(0.1)
4.3 times
4.3 times
-
Baa3 corporate
family rating
Baa3
issuer rating
NM
Average cost of debt
Interest cover
Rating
1
NM – Not meaningful
1
Rating by Moody’s Investors Service.
Gross borrowings of S$698.6 million declined marginally by
0.4% as compared to FY2013.
In September 2014, the Manager completed the early
refinancing of all the existing term loan facilities. The new
facilities, which ranged between 3 to 5 years, have been
obtained on an unsecured basis. Hence, all the properties of
the Trust have been unencumbered as compared to 20.1%
before the refinancing. This improves the financial flexibility
of the Trust. As a result of the early refinancing, the Trust
does not have any refinancing requirement until FY2017. The
weighted average debt maturity profile had been extended
to 4.3 years as at 30 September 2014. The interest coverage
ratio remained healthy at 4.3 times and the average cost of
debt was 2.7% in FY2014. With a well-spread debt maturity
profile, the Trust has a stronger financial structure.
The Trust has an untapped S$1.0 billion multicurrency medium
term note programme (MTN Programme) which may be used
for future financial obligations.
In November 2014, Moody’s assigned a Baa3 issuer rating to
FCOT with a stable outlook, following the withdrawal of its Baa3
corporate family rating. The Baa3 issuer rating was assigned
following Moody’s decision to no longer reflect subordination
in FCOT’s rating after FCOT refinanced all its secured with
unsecured term loan facilities. The stable outlook reflects
Moody’s expectation that the properties of FCOT will continue
to generate stable income, driven by steady occupancy levels
and organic growth from positive rental reversions.
32
Savings from net redemption and conversion
o f S e r i e s A CPPU s b o o s t e d D i s t r i b u ta b l e
In FY2014, 0.1 million Series A CPPUs were redeemed by
the Trust and 12.0 million Series A CPPUs were converted
into new Units by the relevant Series A CPPU holders. The
remaining 0.08 million Series A CPPUs were converted into
new Units by the Series A CPPU holders on 1 October 2014.
Following the completion of the conversion of the Series A
CPPUs on 1 October 2014, there are no longer any Series A
CPPUs outstanding. Savings in Series A CPPU distributions
arising from both the redemption and conversion of Series
A CPPUs, coupled with the lower finance costs, boosted the
distributable income to Unitholders.
Establishe d and im p le m e nte d the DRP for
d istributio ns d e c lare d fo r FY 2014
The DRP was established and implemented for the distributions
declared in FY2014. The DRP provides Unitholders with the
option to receive their distributions declared, either in the form
of Units or cash or a combination of both. Participation in the
DRP is voluntary and Unitholders may elect to participate in
respect of all or part of their unitholdings. The DRP enables
Unitholders to acquire new Units without incurring transaction
or other related costs. Cash retained and Units issued in lieu
of cash distributions under the DRP will enlarge the Trust’s
capital base, strengthen its working capital reserves and
improve the liquidity of the Units.
annual
report
2014
W e l l -spr e ad de b t m atu r i ty p r o f i le
153.6
180.0
365.0
Debt maturity profile as at 30 September 2014
(S$ million)
As at 30 September 2014, the borrowings of the Trust were
as follows:
Borrowings
(all
unsecured)
Amount
Interest
rate
Maturity
SGD term loan
facility
S$180.0
million
Floating
19 September
2017
AUD term loan
facility
A$135.0
million
Floating
19 September
2018
SGD term loan
facility
S$365.0
million
Floating
19 September
2019
The loan maturities are well-spread out, hence, there is no
concentration of borrowings due in one particular year. This
minimises refinancing risks.
The borrowings denominated in Australian dollar provide a
natural hedge for the Australia properties. More details on
interest-bearing borrowings can be found in Note 10 of the
financial statements.
FY2017
FY2018
SGD
FY2019
AUD
As the refinancing was only completed in September 2014, the
Manager is in the midst of hedging a portion of future interest
rate exposure by entering into interest rate swaps. The hedged
interest rate will reduce the exposure of the Trust to interest
rate fluctuations whilst providing certainty in interest costs.
33
Frasers
Commercial
Trust
&
FINANCIAL
REVIEW
Se nsit iv it y an a ly s i s
As at 30 September 2014, 48.6% of the total net property income
of the Trust is derived from the properties in Australia. As
such, the Trust is subject to foreign exchange rate fluctuations,
which affects the income generated from Australian assets.
A 5% strengthening of the Singapore dollar against the
Australian dollar would result in a corresponding decrease of
approximately S$1.5 million on the consolidated total return
for FY2014 for the Trust.
The Trust is subject to interest rate fluctuations, mainly
arising from its interest-bearing borrowings. A 1% increase
or decrease in interest rates on the portion of the Group’s
borrowings that is not hedged, with all other variables held
constant, would correspondingly decrease or increase the
Group’s total return for FY2014 by S$3.8 million.
34
annual
report
2014
P o r t fo l i o
REVIEW
25.1%
25.1%
24.5%
12.9%
17.1%
17.1%
22.7%
10.4%
21.1%
23.6%
P o r t fol io l e a s e e x p i r y p r o f i le b y g ro ss re ntal inc o m e ( A s at 3 0 Sep te mb e r 2 0 1 4 )
Before early renewal
After early renewal1
FY2015
FY2016
FY2017
FY2018
FY2019 &
beyond
61
84
65
12
13
247,002
488,117
322,201
590,789
548,335
Expiries as % total NLA2
10.8
21.4
14.1
25.9
24.1
Expiries as % total Gross Rental Income2
10.4
22.7
17.1
24.5
25.1
Number of leases expiring2
NLA (sq ft) expiring2
As at 30 September 2014. Excludes retail turnover rent.
1
Portfolio lease expiry profile by gross rented income reduced significantly in FY2015 and the lease expiry profile had been lengthened following
the early renewal of underlying leases at Alexandra Technopark. This provides a stable income profile for the Trust.
2
Inclusive of the early renewal of underlying leases of Alexandra Technopark.
TRADE SECTOR MIX
TOP 10 TENANTS
% of total gross
rental income
Hewlett-Packard Singapore Pte Ltd
17.0
Commonwealth of Australia
(Centrelink)
16.7
30
September
20144
Amenities
0.8
0.9
Hamersley Iron Pty Ltd (Rio Tinto)
7.6
Banking, Insurance &
Financial Services
9.0
8.4
BHP Billiton Iron Ore Pty Ltd
5.0
Consultancy / Business Services
7.4
7.2
GroupM Singapore Pte Ltd
3.5
Electronics
3.0
3.2
Microsoft Operations Pte Ltd
3.0
Food and Beverage
6.0
6.3
Cerebos Pacific Ltd
2.9
Government and Government Linked
19.5
18.9
Government Employees Superannuation Board
(Western Australia)
1.8
IT Products & Services
22.4
23.9
1.3
Legal
4.1
2.3
Australia and New Zealand
Banking Group Limited
Medical / Pharmaceuticals
1.0
1.1
PF Lawyers Pty Ltd (DLA Piper)
1.2
14.8
14.7
Multi-media & Telecommunications
1.6
2.3
Others
3.9
4.5
Real Estate / Property Services
2.4
2.2
Retail
3.1
3.0
Shipping / Freight
0.9
1.0
Travel
0.1
0.1
Mining / Resources
TOTAL
4
% of total gross
rental income
30
September
20133
Category
3
As at 30 September 2014
100.0
100.0
n a see-through basis on Alexandra Technopark’s underlying leases.
O
Based on the underlying leases at Alexandra Technopark. The master
lease with Orrick Investments Pte Ltd at Alexandra Technopark expired
on 25 August 2014.
NLA m ix ( A s at 3 0 Sep te mb e r 2 0 1 4 )
45.9%
Business Space
5.0%
Retail
Office
49.1%
35
Frasers
Commercial
Trust
M a r k e t
o v e r v i e w
s i n g a pore
1INTRODUCTION
Colliers International Consultancy & Valuation (Singapore)
Pte Ltd has been appointed by Frasers Centrepoint
Asset Management (Commercial) Ltd to provide an
Independent Market Report on Singapore’s Office and
High-Specifications (High-Specs) Property Markets, for
the purpose of including the report as part of FCOT’s
Annual Report 2014.
FCOT owns two commercial properties – 55 Market Street
and China Square Central at 18, 20 & 22 Cross Street – and
Alexandra Technopark, a High-Specs building in Singapore.
This independent market report dated 17 November
2014 provides a brief overview of Singapore’s office and
High-Specs property markets.
2MACRO -ECONOMIC REVIEW
2.1 Macro-Economic Performance In The Past Year
Singapore’s real Gross Domestic Product (GDP) grew
4.8% year-on-year (YoY) in 1Q 2014. However, economic
growth moderated to 2.4% YoY in 2Q 2014 due to a sharp
slowdown in the manufacturing sector. Based on advance
estimates1 from the Ministry of Trade and Industry (MTI)
released on 14 October 2014, Singapore’s GDP growth
rate stayed firm at 2.4% YoY in 3Q 2014.
2.2 Economic Outlook
Singapore’s economy is expected to improve modestly for
the rest of 2014 and in 2015, led by a continued recovery
in the United States (US) economy. In Asia, the ASEAN
economies are likely to stay resilient, supported by the
continued expansion in intra-Asian trade and robust
domestic demand. Against this backdrop, externallyoriented sectors such as manufacturing and traderelated services are expected to provide some support
to economic growth. Domestically-oriented healthcare
and education sectors will also stay resilient on the back
of strong underlying demand while the financial services
and business services sectors could pick up if sentiments
improve.
However, uncertainties in the global macroeconomic
environment remain. They include worries over the pace
of economic recovery in the Eurozone and Japan due to
structural headwinds. Moreover, global political tensions,
such as the unresolved crisis in Ukraine, Iraq and Syria
could result in continued trade disruptions, rising oil prices
and weakened investment growth across the region. Locally,
industries that are reliant on labour could experience
profit margin pressures due to the tight labour market.
Taking the above into account, the MTI has narrowed the
2014 full year growth forecast for the Singapore economy
to between 2.5% and 3.5%, from the previous range of 2%
to 4%. Singapore’s economy could maintain a similar pace
of expansion in 2015.
3OFFICE PROPERTY MARKET OVERVIEW
3.1 Existing Supply 2
Singapore had 79.7 million sq ft of office space as of 3Q
2014, down 0.5% from 80.1 million sq ft as of 4Q 2013.
52.4% of the space was located in the Central Business
District (CBD)3 while the City Fringe held the next largest
share at 39.3%. The remaining 8.3% were scattered across
the Suburban areas.
21.7% (or 17.3 million sq ft) of the islandwide office space
are located in the Raffles Place/New Downtown micromarket, which encompasses the core business and financial
district in Singapore. Both Premium4 and Grade A5 office
stock made up 70.5% (12.2 million sq ft) of the total office
he advance GDP estimates for 3Q 2014 are computed
T
largely from data in the first two months of the
quarter (i.e. July and August 2014). They are intended
Premium
as an early indication of the GDP growth in the
15
quarter, and are subject to revision when more
Grade A
comprehensive data become available.
Grade B
2
All existing supply and stock are stated in terms
Others
of Net Lettable Area (NLA).
10
3
The CBD comprises the Raffles Place/New Downtown,
Shenton Way/Tanjong Pagar, City Hall/Marina Centre,
Orchard and Bugis/Beach Road micro-markets.
5
4
The Premium Grade office buildings are new
buildings with the highest quality specifications
in the Raffles Place/New Downtown area.
0
5
The Grade A office buildings are good-quality buildings
Orchard
Raffles Place/
City Hall/
Bugis/
Shenton Way/
New Downtown Tanjong Pagar
Marina Centre
Beach Road with well sought-after specifications in strategic
locations that are well served by amenities and
transport nodes.
Source: Realis, URA/Colliers International Singapore Research, October 2014
Net Floor Area (million sq ft)
20
36
CBD O f f i ce S pace b y M i cr o -m arke ts & Grad e s
( a s of 3Q 2 0 1 4 )
1
annual
report
2014
supply in this micro-market. Grade B6 office stock formed
20.2% (3.5 million sq ft) while the rest were space of
other gradings.
average net new supply of 1.2 million sq ft and net new
demand of 1.0 million sq ft, respectively, for the five years
from 2009 to 2013.
Both the subject office developments, 55 Market Street
and China Square Central are located in the Raffles Place/
New Downtown micro-market, specifically within a district
encompassing the Outram – China Square, Downtown
Core – Raffles Place and Downtown Core – Phillip Planning
Subzones (i.e. Market Street/China Square micro-district).
The majority of the new office space to be completed
between 4Q 2014 and 2018 will materialise in the CBD,
with 30.0% of the space located in the Raffles Place/New
Downtown micro-market. Within this micro-market, about
0.9 million sq ft or 31.2% of the upcoming space will be
completed in the subject Market Street/China Square
micro-district. Some 37.8% of the upcoming space will
be located in the Rest of the CBD while potential supply
outside the CBD accounts for the remaining 32.2%.
3.2 Future Supply 7
Colliers International Research estimates that some
9.1 million sq ft of new office space is expected to be
completed from 4Q 2014 to 20188. Taking into account
a net contraction9 in islandwide office space stock by
355,000 sq ft in the first nine months of 2014, this reflects
an annual average future supply of some 1.8 million sq ft
of office space from 2014 (full year) to 2018. This is 5.9%
and 28.6% above the annual average net new supply of
1.7 million sq ft and net new demand of 1.4 million sq ft,
respectively in the last five years.
Within the Raffles Place/New Downtown micro-market,
an estimated 2.7 million sq ft of new office space will be
completed from 4Q 2014 to 2018. Taking into account
the 41,000 sq ft net contraction in supply in the first nine
months of 2014, this translates to an annual average
new supply of about 0.5 million sq ft from 2014 (full year)
to 2018. This is 58.3% and 50.0% lower than the annual
Overall new office space supply is expected to stay at a
high of about 1.9 million sq ft in 2014 (full year) before
moderating to a mere 0.6 million sq ft in 2015. Supply of
new office space is then expected to climb to a high of 4.1
million sq ft in 2016. Thereafter, the pipeline supply will
ease to some 0.9 million sq ft and 1.2 million sq ft in 2017
and 2018 respectively. Specifically, two new projects will
be completed in the subject micro-district – CapitaGreen
(0.7 million sq ft in 4Q 2014) and Robinson Towers (0.2
million sq ft in 2017) (See charts: Potential Supply of
Islandwide Office Space).
Pote ntial sup p ly o f islandwide
o ffic e spac e ( a s o f 3 Q 2 0 1 4 )
5,000
Net Floor Area (‘000 sq ft)
Information from Urban Redevelopment Authority’s (URA)
Real Estate Information System (Realis) showed that this
subject micro-district held a total office space of some
11.2 million sq ft as of 3Q 2014, relatively unchanged
from a year ago (See chart: CBD Office Space by MicroMarkets & Grades).
4,000
3,000
2,000
1,000
0
P ot e nt ia l s u p p ly o f i s la n dw i de
o ffic e s pace ( a s of 3Q 2014)
2014F
2015F
2016F
2017F
2018F
Raffles Place/New Downtown
Rest of CBD
30.0%
32.2%
Market Street/
China Square
Micro-District
31.2%
Outside Subject
Micro-District
37.8%
Raffles Place/
New Downtown
68.8%
Rest of CBD
Outside CBD
Outside CBD
Source: Realis, URA/Colliers International Singapore Research,
October 2014
The Grade B office buildings are average quality buildings in locations
that are reasonably served by some amenities and transportation
nodes.
7
All future supply is stated in terms of NLA.
8
Potential supply includes space under construction and planned
but the actual level of new supply could change due to changes in
the status of planned projects.
9
Net contraction occurs when the amount of space withdrawn for
redevelopment, refurbishment or change of use exceeds the amount
of new completions during a specific time period. Examples of office
space withdrawn in the first nine months of 2014 include 700 Beach
Road, 2 Havelock Road and 456 Alexandra Road.
6
October 2014
37
Frasers
Commercial
Trust
M a r k e t
o v e r v i e w
s i n g a pore
3.3 Demand & Occupancy
Supported by healthy economic performance, companies
across most business sectors saw brighter prospects
and are gearing up their operations to position for
growth. Firms opting to take a more proactive approach
in reviewing expansion and relocation options with a view
to lock in rents also contributed to the buzz in the office
leasing market in the first nine months of 2014.
time high of 94.1% as of September 2014. This is up from
87.0% in the same period a year ago. The occupancy
rates of Grade A and Grade B space in the same micromarket correspondingly averaged 97.2% and 97.6%. In the
subject micro-district located within the Raffles Place/
New Downtown area, 95.7% of office space were occupied
as of 3Q 2014, an improvement of 3.8-percentage points
from a year ago.
Leasing demand continued to be led by Premium and Grade
A office space in the Raffles Place/New Downtown micromarket as companies sought modern and efficient floor
space to house their operations. Besides the efficiency
that companies can achieve through consolidating their
operations in one location, they also aim to attract and
retain young, talented employees who are generally
observed to prefer working in more centralised and new,
state-of-the-art office buildings.
The overall occupancy of Grade A and B office buildings in
the CBD also remained tight and stayed above the technical
full occupancy rate of 95% in the first nine months of
2014. As of September 2014, the average occupancy rate
for Grade A and B office space in the CBD stood at 97.6%
and 95.8%, respectively.
As at 30 September 2014, 55 Market Street and China
Square Central achieved occupancy rates of 100.0%10
and 98.8%, respectively. These are above the occupancy
rates of office space in the Raffles Place/New Downtown
area (See chart: Occupancy Rates of CBD Office Space
by Grades).
Strong demand for quality office space over the past
12 months supported an improvement in the average
occupancy rate for Premium Grade office space in the
Raffles Place/New Downtown micro-market to an all10
Committed occupancy as at 30 September 2014.
100
18
98
16
96
14
94
12
92
10
90
8
88
6
86
4
84
2
82
0
80
2009
2010
2011
2012 2013
1Q13
2Q13
3Q13
4Q13 1Q14 2Q14 3Q14*
GDP Growth Rate (% YoY)
Occupancy Rate (%)
OCCUPANCY RATES OF CBD OFFICE SPACE BY GRADES ( a s o f 3 Q 2 0 1 4 )
-2
Premium Grade (Raffles Place/New Downtown)
Grade A (Raffles Place/New Downtown)
Grade B (Raffles Place/New Downtown)
Grade B (CBD)
Grade A (CBD)
Market Street/China Square Micro-District
GDP (YoY Change)
* GDP Growth is based on Advance Estimates
38
Source: MTI/Colliers International Singapore Research, October 2014
annual
report
2014
3.4 Tenant Profile
According to Colliers International’s research,
occupiers of office space in the CBD mainly stems
from companies in the banking, insurance and
financial services industries, which accounts for
39.3% of the total net floor area occupied in the area
as of 3Q 2014. They are the dominant users across
all building grades, particularly in Premium and
Grade A office buildings. Other major space users
include firms from the fields of accounting & other
professional services (11.8%), media, information
& communications technology (7.6%), and energy,
commodities & other resources (5.5%), transportation
& logistics (5.5%), and legal & arbitration (4.9%).
Reflecting the general office market occupier trends,
the subject properties are also mainly occupied by
space users from the banking, insurance, financial
services, legal, consultancy and other business
services industries. Due to the mixed-use nature at
China Square Central, about 19.8% of the office space
is also occupied by firms from the food and beverage
industry (See charts: Breakdown of Occupier Profile
of Office Space in the CBD, Occupier Profile of Office
Space in the CBD by Building Grades and Proportion
Breakdown of Occupier Profile of Office Space in 55
Market Street & China Square Central).
Bre akd own o f o c c up ie r p ro file o f o f f ice
spac e in the c bd ( a s o f 3 Q 2 0 1 4 )
11.8%
7.6%
39.3%
5.5%
5.5%
4.9%
25.4%
Banking, Insurance
and Financial Services
Energy, Commodities and
Other Resources
Accounting and Other
Professional Services
Transportation and Logistics
Media, Information and
Communications Technology
Legal and Arbitration
Others
Source: Colliers International Singapore Research, October 2014
Pro p o rtio n Bre akd own o f o c c up ier
p ro file o f o ffic e spac e in 55 m arket
stre e t & CH ina square c e ntral
oc c u p ie r p r o f i le o f o f f i ce s pac e in
t he cb d b y b u i ldi n g g r a de s
( a s of 3Q 2014)
(as of 3Q 2014)
50
40
80
60
(%)
40
20
10
20
Energy, Commodities and
Other Resources
Legal and Arbitration
Others
Source: Colliers International Singapore Research, October 2014
55 Market Street
Others
Travel
Transportation and
Logistics
Mining / Resources
Media, Information
and Communications
Technology
Multimedia & Telecommunications
Accounting and Other
Professional Services
Others
Banking, Insurance and
Financial Services
Grade B
Legal
Grade A
Food and Beverage
0
Premium
Banking, Insurance & Financial Services
0
30
Proportion (%)
100
Source: FCOT/Colliers International Singapore Research, September 2014
39
Frasers
Commercial
Trust
M a r k e t
o v e r v i e w
s i n g a pore
R e n ta l r ate s o f o ffic e spac e by g rad e s in the
r a f f le s p lace /n e w downtown m ic ro -m arke t ( a s o f 3 Q 2 0 1 4 )
18
S$11.67
12
14
11
S$10.25
10
12
10
9
S$8.52
8
6
8
4
7
2
6
0
-2
5
2009 2010 2011 2012 2013
Premium Grade
* GDP Growth is based on Advance Estimates
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14*
Grade A
Grade B
GDP (YoY Change)
Source: MTI/Colliers International Singapore Research, October 2014
3.5 Rents
Positive economic conditions coupled with the tight office
market gave landlords the mandate to raise their rent
expectations across the market.
The average monthly gross rents of Premium Grade office
space in the Raffles Place/New Downtown micro-market
surged 17.6% YoY to S$11.67 per sq ft as of 3Q 2014,
while those for Grade A space rose 12.1% to S$10.25 per
sq ft over the same period. The monthly gross rents for
Grade B office space in the Raffles Place/New Downtown
micro-market improved by a modest 5.4% YoY to average
at S$8.52 per sq ft by September 2014 (See chart: Rental
Rates of Office Space by Grades in the Raffles Place/New
Downtown Micro-Market).
3.6 Market Outlook
Despite some headwinds in the global economic and
political environment, the outlook for the Singapore office
property market is expected to remain positive for the
rest of 2014 and in 2015.
The restoration of business confidence is expected to
gather pace amid an improvement in global economic
prospects. Office space take-up is also expected to
continue to benefit from the more diversified demand
sources in the market such as the technology and infocommunications, pharmaceuticals, banking and financial
services, insurance, energy and commodities industries.
Supply-wise, though the office space market in Singapore
could see a temporary moderation in occupancy in the
last quarter of 2014 when some 2.3 million sq ft of new
supply comes on stream, the expected under-supply of
new office space in 2015 will encourage a gradual rebound
in occupancy until at least early 2016.
40
16
GDP Growth Rate (% YoY)
Monthly Gross Rental Rate (S$ per sq ft)
13
As such, office rents in the Raffles Place/New Downtown
micro-market are expected to increase by up to 15% in 2014
and maintain a broadly similar pace of increase in 2015.
4HIGH-SPECS PROPERTY MARKET OVERVIEW
High-Specs developments cater to industrialists involved
in high technology, value-added, knowledge-based as
well as research & development (R&D) activities. Offering
a hybrid of office-industrial building characteristics,
such developments are equipped with high building
specifications, such as higher floor-to-ceiling heights,
floor loadings, smart building automation systems,
air-conditioning and false ceiling boards. They are also
generally complemented by supporting amenities such
as cafes and medical clinics etc.
High-specs developments which are mostly held for
rental income are either independent/standalone
buildings or located within designated business parks.
Generally, independent high-specs facilities have similar
specifications and occupier profile and activities as those
located in the business parks, but are built on smaller
sites. Comparatively, business parks are larger masterplanned land use zones created by the Government and are
characterised by larger plots of at least five hectares, parklike environments complete with lush open greeneries,
landscaping and user-centric amenities such as retail
and food & beverage uses as well as security.
4.1 Existing Supply
There are no official definition and statistics on the
independent high-specs space segment. Based on Colliers
International’s estimates as of 3Q 2014, Singapore had
about 11.7 million sq ft of independent high-specs space
as of 3Q 2014. This represents an increase of about 880,451
sq ft or 8.1% from 4Q 2013.
annual
report
2014
As such, Singapore’s total stock of business park space is
expected to reach 23.0 million sq ft by 4Q 2016, assuming
the completion of all the known pipeline projects as
of 3Q 2014, and that no space is withdrawn over the
forecast period (See chart: Net New and Potential Supply
of Independent High-Specs and Business Park Space).
Over the same period, there was a slight increase in the
stock of business park space from 16.7 million sq ft as
of 4Q 2013, to 17.2 million sq ft as of 3Q 2014.
This brought the overall quantum of high-specs space
(i.e. independent high-specs and business park space)
in Singapore to about 28.9 million sq ft as of 3Q 2014.
4.2 Future Supply
Based on available information as of 3Q 2014, an estimated
1.7 million sq ft11 of new independent high-specs space are
expected to be completed from 4Q 2014 to 4Q 2016, with
no known upcoming supply beyond 2016. Notably, there
is no new pipeline supply near Alexandra Technopark.
On average, the supply of independent high-specs space
is projected to rise by about 869,702 sq ft annually from
2014 (full year) to 2016, after including the estimated
880,451 sq ft completed from 1Q-3Q 2014. This is 67.1%
higher than the annual average supply of around 520,568
sq ft and 48.3% above the annual average demand of
586,288 sq ft from 2011 to 2013.
4.3 Demand & Occupancy
Colliers International’s estimates showed that net takeup of independent high-specs space, which amounted
to 599,046 sq ft in 2013, was significantly lower than
the net addition of 904,901 sq ft during the year. This
was partly due to the lag between building completion
and the physical occupation of the space, as well as
the slower space take-up seen in 2H 2013 following the
Government’s stricter enforcement of its guidelines on
the legitimate use of industrial space. Consequently, the
average occupancy rate eased by 2-percentage points
from 4Q 2012 to 88.4% as of 4Q 2013.
Similarly, as the net addition of independent highspecs space at 880,451 sq ft exceeded the estimated net
absorption of 443,398 sq ft in the first nine months of 2014,
this led to a further easing in the average occupancy rate
to 85.5% as of 3Q 2014.
Net Floor Area (‘000 sq ft)
N e t ne w a n d p ote n ti a l s u p p ly of
ind e p e n de n t h i g h - s p e cs a n d
b u sin e ss pa r k s pace ( a s of 3Q 201 4 )
4,000
In the business park segment, the average occupancy rate
gained 3.2-percentage points in 2013 to 84.1% as of 4Q
2013, as net absorption at 560,000 sq ft far exceeded the
net new supply of just 43,000 sq ft. Likewise, as net new
demand at 743,000 sq ft surpassed the net new supply of
474,000 sq ft in the first nine months of 2014, the average
occupancy rate rose further to 86.1% as of 3Q 2014.
3,000
2,000
1,000
0
2011
2012
2013
2014F
2015F
2016F
C
ompleted
(Independent High-Specs)
Upcoming
(Independent High-Specs)
Completed (Business Park)
Upcoming (Business Park)
Source: JTC/Colliers International Singapore Research, October 2014
Hence, by 4Q 2016, Singapore will have a total estimated
13.4 million sq ft of independent high-specs space,
assuming that all the upcoming supply are completed and
that there is no stock withdrawal over the forecast period.
In terms of business park space, about 5.8 million sq ft
is expected to be completed from 4Q 2014 to 4Q 2016,
with no known pipeline supply after 2016. Including the
net addition of about 474,000 sq ft from 1Q-3Q 2014,
this will translate into an annual average supply of 2.1
million sq ft from 2014 (full year) to 2016, significantly
higher than the annual average supply of about 552,547
sq ft and annual average demand of 893,404 sq ft from
2011 to 2013.
Potential supply includes space under construction and planned
but the actual level of new supply could change due to changes in
the status of planned projects.
11 As at 30 September 2014, the underlying occupancy rate
for Alexandra Technopark was 96.9%.
4.4 Tenant Profile
Independent high-specs facilities are typically built on
Business 1 (B1)12-zoned land but have a different tenant
profile from conventional industrial buildings. Occupants of
such independent high-specs developments are similar to
those in the business parks, and includes a wide range of
light and clean uses such as R&D, data centre, information
technology (IT), telecommunications, electronics,
healthcare devices, product design, development and
testing, technical support helpdesk, service centres and
back-end operations of financial institutions.
12
Business 1 (B1): These are areas used or intended to be used mainly
for clean industry, light industry, warehouse, public utilities and
telecommunication uses and other public installations for which the
relevant authority does not impose a nuisance buffer greater than 50
metres. Certain general industrial uses that meet the nuisance buffer
requirements of not more than 50 metres imposed by the relevant
authority may be allowed in the B1 zones, subject to evaluation by the
relevant authority and the competent authority.
41
Frasers
Commercial
Trust
M a r k e t
o v e r v i e w
s i n g a pore
Rents for upper-floor independent high-specs space eased
by another 0.3% quarter-on-quarter in 1Q 2014 to S$2.94
per sq ft per month, as the need to ensure that prospective
tenants qualify for the B1-zoned premises continue to
weigh on leasing activity. However, the gradual absorption
of space amid limited pipeline supply for the rest of 2014
and 2015, supported a rebound in the average rent of
upper-floor independent high-specs space to S$2.95
per sq ft in 2Q 2014, which remained stable in 3Q 2014.
For business park space, rental information sourced
from URA’s Realis, which are based on actual rental
transactions, reflected a 17.8% surge in the median gross
monthly rent from S$3.81 per sq ft as of 4Q 2012 to S$4.49
per sq ft as of 4Q 2013, before declining by 10.9% to S$4.00
per sq ft as of 3Q 2014. The wider fluctuations seen in
the rental trend is because median rents are dependent
on factors such as the number of transactions concluded
during the quarter, the location and age of the building,
the type of unit (e.g. research or non-research), as well
as the floor level and size of the unit.
According to Colliers International’s research, the average
gross monthly rent for islandwide business park space
rose at a more moderate rate of 3.6% in 2013, and inched
42
4.50
4.00
3.50
3.00
2.50
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
2013
2012
2.00
2011
Colliers International’s research showed that the average
monthly rents of upper-floor independent high-specs
premises rose 1.0% in 2013 to reach S$2.95 per sq ft as
of 4Q 2013. This was due mainly to the 2.7% increase
in 1H 2013, as rents softened by 1.7% in 2H 2013 amid
slower space take-up.
5.00
2010
It is also observed that independent high-specs facilities
with attractive attributes such as a central location, better
building specifications, a good corporate image and a
conducive environment with supporting amenities like the
business parks, are able to attract end-users and achieve
higher rents that are similar to business park facilities.
Av e rag e g ro ss Re nts o f ind e p e ndent
hig h-sp e c s spac e and m e d ian g ross
re nts o f busine ss park spac e
2009
4.5 Rents
High-Specs buildings in Singapore offer mainly space on
the upper floors for lease rather than ground floor space
as most cater to back-office functions as well as higher
value add and technology-based activities which do not
require a ground level location.
up just 0.7% in the first nine months of 2014. While 2013’s
gain can be attributed to the higher rents achievable for
newer and recently refurbished business park premises,
the slowdown in rental growth in the first nine months of
2014 despite a tightening in available supply was due to
tenants’ cost conscious stance amid mixed sentiments
(See chart: Average Gross Rents of Independent HighSpecs Space and Median Gross Rents of Business
Park Space).
S$ Per Sq ft Per Month
Alexandra Technopark has a similar occupier profile.
As at 30 September 2014, the majority 67.8% of the
development’s total lettable area are occupied by firms
involved in IT Products & Services. Other major tenants
include companies involved in Electronics (9.7%), Banking,
Insurance & Financial Services (3.4%), Multimedia &
Telecommunications (3.1%), Shipping/Freight (2.6%),
Mining/Resources (2.5%), and Medical/Pharmaceuticals
(2.1%).
Business Park Space
Independent High-Specs Space (Upper Floors)
Note: Colliers International reviewed and revised its basket of
independent high-specs buildings in 1Q 2014 to better reflect the
rental movements of this category of space; the historical rental
series has been revised and updated accordingly.
October 2014
4.6 Market Outlook
Rents of high-specs facilities, such as those located
within the business parks, and independent high-specs
buildings are expected to hold steady in 4Q 2014. Despite
a tightening in supply, tenants are expected to remain
cost-sensitive in the current climate of high business
operating costs, which will keep rents relatively stable.
In the subject micro-market where Alexandra Technopark
is located, rents could potentially register some upside,
given the dearth of new supply of independent highspecs space. Additionally, its proximity to the city centre
will appeal to qualifying end-users who do not require a
central business space location, especially in the wake
of rising office rents.
annual
report
2014
M a r k e t
o v e r v i e w
a u str a l i a
MARKET OVERVIEW PERTH , AUSTRALIA
PERTH CBD o ffic e SUPPLY ADDITIONS
The Western Australian economy has cooled within the last
12 months, precipitated largely from reductions in forecasted
mining investment and decreasing commodities prices. The
Western Australia Gross State Product (GSP) growth has
historically been above National Gross Domestic Product
(GDP) growth over the past 10 years with an annual average
growth of 4.9%. Forecast State GSP growth for 2014-2015
is 2.75% which is higher than the National GDP growth
forecast of 2.50%. Forecast State and National GDP growth
for 2015-2016 is 3.0%. The major resources sector operators
such as Chevron, BHP Billiton and Rio Tinto are all in a cost
containment phase and focusing on completing existing
projects at a sustainable level before considering moving to
the next phase of projects. Over the medium term, it is likely
engineering companies may increasingly look to cut their
workforce in Perth (due to associated costs) and explore
offshore options for engineering works impacting the levels
of absorption and market expansion going forward.
Net supply additions over the 12 months to July 2014 totalled
7,097 sq m. The next major wave of new supply is expected from
early 2015 with eight new buildings potentially completing. A
total of 170,282 sq m of new office space is under construction/
refurbishment with completion in 2015, with 86.4% comprising
new builds of which 61.9% is pre-committed. Old Treasury
Building (30,000 sq m) and Brookfield Place (34,000 sq m)
comprise the Prime Grade new stock which is currently
under construction. Of this some 68.8% is pre-committed.
However the relocation of existing lessees from prime space
into both will create considerable Prime backfill. (See chart:
Perth CBD Office Supply).
pe r th cb d o f f i ce s u p p ly
2015
2018
Beyond 2018
Under Construction / Under Construction
55,000 sq m
Refurbished
170,282 sq m
80
Mooted
290,500 sq m
p e rth c bd Histo rical and
fo re cast ne t abso rp tio n
60
40
Uncommited New
Commited New
Uncommited Refurbished
Mooted
60
26,450 sq m
32,064 sq m
13,212 sq m
40
20
0
(20)
(40)
(60)
Commited Refurbished
Forecast
80
‘000 sq m
Perth City Link (potential space)
Milligan Square
Elizabeth Quay (Chevron Site)
396 Murray Street
Bishop See - Tower 2
480 Hay Street
The Melbourne
Kings Square (Building 5)
Capital Square
253 St. George’s Terrace
999 Hay Street
Brookfield Place - Tower 2
32 St. George’s Terrace
100
0
Perth Diocese
120
Old Treasury Building
20
Public Trustee Building
Office (‘000 sq m)
100
Net absorption in the Perth CBD office market over the
twelve months to July 2014 was recorded at negative 70,626
sq m. This is a material decrease from July 2013 where net
absorption for the twelve months prior was negative 30,836
sq m. The 12-year historical average annual net absorption
from January 2003 to 2014 was 26,450 sq m. In comparison
the forecast annual net absorption from January 2015 to 2020
is greater at 32,064 sq m per annum. (See chart: Perth CBD
Historical and Forecast Net Absorption).
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
120
NET ABSORPTION OUTLOOK
Net
Absorption
12 year Historical
Average
Forecast Average
Source: CBRE – September 2014
Source: Property Council of Australia and CBRE – September 2014
43
Frasers
Commercial
Trust
M a r k e t
o v e r v i e w
A u str a l i a
Looking forward, total vacancy is likely to rise significantly to
approximately 12.9% by January 2015 and 19.4% by January
2016. This is due to a more widespread downturn in business
confidence of late spreading from resources sector industries
to professional service industries. The next wave of new
supply has become 2015 centric. During 2015, vacancy is
likely to peak at approximately 19.4% by year end in line with
a spate of new supply coupled with continued soft demand
on the back of mega resources projects such as Gorgon and
Wheatstone moving to production phase. Post-2015, vacancy
rates reflects the impact of a potential shift in the tenancy
mix as the cycle moves from the construction to production.
Despite the low commodity prices, however, Rio Tinto and BHP
Billiton are committed to increase iron ore output for existing
projects. This may have a positive impact on office demand
from downstream tenants, albeit overall demand conditions
remain weak. CBRE expect vacancy to trend downwards post
2016, however this is on the assumption the next phase of
resources projects such as Gorgon expansion and Browse
materialise and the resultant positive absorption as forecast.
Average Premium Grade rentals are currently approximately
A$775 per sq m per annum having declined from over A$800
per sq m per annum during 2014. A further decline in rental
of approximately 3.0% to 6.0% (depending on quality of stock,
lease terms and incentive level) is forecast during 2015, with
incentives to increase further from 27.5% and expected to
peak at an average of 32.5% by the end of 2015. Hence CBRE
are of the opinion that market rent will continue to negatively
correct as vacancy rises, then remain flat post-2015 while
generally high vacancy is forecast to persist for some time.
As a result of significant supply additions including the known
supply in 2015 and Woodside’s 55,000 sq m building forecast
for 2018, rental growth is unlikely given high vacancy until
post-2018, unless exceptionally high levels of investment
spend in the resources sector emerge post-2016, which in
the current climate remains unlikely.
p e rth c bd OFFic e Histo rical and
fo re cast vacancy
35
30
17.0%
25
15.3%
20
7.1%
15
10
5
0
Forecast
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
According to the latest Property Council of Australia (PCA)
vacancy survey, total market vacancy increased from 9.0% in
January 2014 to 11.8% in July 2014. Direct vacancy accounted
for 9.0% (or 144,772 sq m) of the total vacancy whilst available
sub-lease space (not in occupation) accounted for 2.7% (or
43,764 sq m). Over the period from January 2014 to July
2014, Premium Grade vacancy increased from 1.4% to 3.9%.
Grade A vacancy also increased from 10.2% to 12.7%. In the
short term Prime vacancy is expected to remain high over
2015 as completions and tenancy relocations occur in both
Premium and Grade A markets. Into 2016 and 2017 CBRE
are forecasting stabilisation and decline in Prime vacancy as
higher occupancy becomes centred within prime buildings
and vacancy in secondary grades persist for a longer period.
p e r t h c b d OFFICE MARKET RENTAL AND
INCENTIVE PROJECTIONS
Vacancy %
PERTH CBD OFFICE VACANCY
Total Vacancy
Factor
12 year Historical
Average
Forecast
Average
Perth CBD Office Vacancy Forecast
Jan-14
Jan-15
9.0%
12.9%
Jan-16
Jan-17
19.4%
16.8%
Jan-18
Jan-19
14.1%
13.9%
Source: Property Council of Australia and CBRE – September 2014
44
annual
report
2014
I n v e s to r
RELATIONS
“The Manager believes that timely, transparent and
active communication are key pillars of fair and effective
communication with stakeholders”
Proact iv e I nv e s to r E n gag e m e n t
The Manager seeks to maintain close communication
and active interaction with the investment community
through proactive and regular investor engagement
activities. During the financial year, the Manager engaged
key stakeholders including analysts, fund managers and
investors via various platforms such as briefings, conference
calls, conferences, non-deal roadshows and one-to-one
meetings, thus, providing key stakeholders regular access to
senior management. These meetings enabled the Manager
to access potential new investors whilst strengthening
relationship with existing investors. The Manager also
conducted property visits to provide investors with a better
understanding of the properties of FCOT and increase
awareness on the proactive asset management initiatives
undertaken by the Manager.
In FY2014, the Manager participated in 28 conferences,
conference calls, meetings and non-deal roadshows and
met with more than 100 existing and potential investors
and analysts in Bangkok, Hong Kong, Singapore and Tokyo.
These are excellent avenues for the Manager to keep
them updated on the latest performances, developments,
strategies and outlook of the Trust. At the same time, the
Manager is also able to understand the matters which are
key to investors. The Manager also conducted analysts’
briefings and investors’ luncheon after the announcements
of half year and full year results to provide updates on the
latest performances of FCOT.
On 22 January 2014, the fifth AGM was held where the
Board of Directors provided updates on the performances,
outlook and strategies of FCOT. The AGM is also another
good avenue for Unitholders to engage directly with the
Board of Directors.
From left to right: Ms Wong Ai Ai, Principal, Baker & McKenzie.Wong &
Leow; Mr Lawrence Wong, Minister for Culture, Community and Youth
and Second Minister for Communications and Information; Mr Low Chee
Wah and Mr David Gerald, Founder, President and CEO of SIAS
En han c in g C o m m u n i cati o n
FCOT wins p re stig io us award in c o rp orate
governance for the second consecutive
ye ar
Materials such as annual reports, investor presentations
and press releases, asset details, distribution history,
financial information, information on the Board of Directors
and management are also set out on the FCOT website at
www.fraserscommercialtrust.com. The website enables
stakeholders to have equal and easy access to information.
Announcements made on the Singapore Exchange are also
posted on the FCOT website.
For the second consecutive year, FCOT was conferred
the runner-up in the Singapore Corporate Governance
Award under the REITs and Business Trusts category at
the 15th SIAS Investors’ Choice Award 2014. Winning this
award for the second consecutive year is a testament of
the investment community’s confidence in FCOT and its
commitment to continue upholding high standards of
corporate governance practices.
45
Frasers
Commercial
Trust
i n v e s to r
RELATIONS
In v e stor R e l ati o n s Ca le n da r i n FY 2 014
First Quarter FY2014
(1 October 2013 – 31 December 2013)
Third Quarter FY2014
(1 April 2014 – 30 June 2014)
Activities
Month
Analysts’ Briefing on FY2013 results
October
Post-results investors luncheon
October
Second Quarter FY2014
(1 January 2014 – 31 March 2014)
Activities
Non-deal roadshow in Singapore
Month
January
Bank of America Merrill Lynch ASEAN Stars
Conference 2014
March
Non-deal roadshow in Tokyo
March
Activities
Month
JP Morgan Asia Pacific Real Estate Conference
in Singapore
April
Macquarie ASEAN Corporate Day in Hong Kong
April
Non-deal roadshow in Hong Kong
April
Analysts’ Briefing on FY2014 first half results
April
Post-results investors luncheon
April
Citi ASEAN Investor Conference in Singapore
June
Fourth Quarter FY2014
(1 July 2014 – 30 September 2014)
Activities
Month
DBS The Pulse of Asia Conference in Singapore
July
OCBC Global Treasury Event
August
Opportunities in Gold, REITs and Business
Trust Conference in Bangkok jointly organised
by DBS Vickers and SGX
August
Non-deal roadshow in Bangkok
August
An aly st C ov e r ag e
FCOT is covered by the following brokerage houses:
1. AmFraser Securities
2. CIMB Research
3. DBS Vickers Research
4. OCBC Investment Research
5. Religare Capital Markets Research
6. RHB OSK-DMG Research
7. Standard Chartered Equity Research
To promote open and transparent communication,
the Manager values and welcomes market feedback,
which may be made via the following channels:
Telephone: +65 6276 4882
Facsimile: +65 6276 8942
Email: fcot@fraserscentrepoint.com
46
T ot a l ret u r n
for f y 2 0 1 4
15.1%
1
In FY2014, FCOT delivered a total
return of 15.1% to Unitholders,
exceeding the total return of the
FTSE REIT Index of 8.1%1.
Source: Bloomberg
1
Assumes dividends are reinvested.
annual
report
2014
Dist r ib u t io n s
FCOT established and implemented the DRP for the distributions declared in
FY2014. The DRP provides Unitholders with an option to receive their distributions
either in cash, Units or a combination of both. A summary of FY2014 distributions
are as follows:
Financial
Period
1 October
2013 to 31
December
2013
Distribution Distribution Per
components
Unit
(cents)
Taxable1
0.8562
Tax-exempt
0.7548
0.5301
Capital
0.0747
–
Total4
2.0483
1.3863
28 February 2014
2 January 2014
Taxable
1.2015
0.7940
Tax-exempt2
0.8509
0.5622
2
Total4
2.0524
1.3562
ax-exempt income distribution is exempt from
T
tax in the hands of all Unitholders.
3
30 May 2014
1 April 2014
Taxable1
1.3476
0.8433
Tax-exempt2
0.8435
0.5279
Total4
2.1911
1.3712
29 August 2014
1 July 2014
apital distribution represents a return of capital
C
to Unitholders for tax purposes and is therefore
not subject to income tax. For Unitholders who
hold the Units as trading assets, the amount
of capital distribution will be applied to reduce
the cost base of their Units for the purpose of
calculating the amount of taxable trading gains
arising from the disposal of the Units. No tax
will be deducted at source from this component.
Taxable
1.3237
0.8286
4
Tax-exempt2
0.8908
0.5577
he tax treatment as described above will apply
T
to Unitholders electing to receive distributions
in Units under the DRP.
Total4
2.2145
1.3863
28 November 2014
1 October 2014
3
1
Payment date
1 April 2014
to 30 June
2014
Payment date
1 July
2014 to 30
September
2014
Notes:
1
Taxable income distribution - qualifying investors
and individuals (other than those who hold their
Units through a partnership) will generally receive
pre-tax distributions. These distributions are
exempt from tax in the hands of individuals
unless such distributions are derived through a
Singapore partnership or from the carrying on
of a trade, business or profession. Qualifying
foreign non-individual investors will receive their
distributions after deduction of tax at the rate
of 10.0%. All other investors will receive their
distributions after deduction of tax at the rate
of 17.0%.
1.2188
2
Payment date
1 January
2014 to 31
March 2014
Distribution Per
Series A CPPU
(cents)
1
Payment date
Cal e ndar of F i n a n ci a l E ve n ts FY 2 0 1 5
(subject to changes by the Manager without prior notice)
January 2015
• Sixth AGM
• Release of FY2015 First Quarter Results
February 2015
• Payment of distribution for FY2015 First Quarter
April 2015
• Release of FY2015 Second Quarter Results
May 2015
• Payment of distribution for FY2015 Second Quarter
J u ly 2 0 1 5
• Release of FY2015 Third Quarter Results
August 2015
• Payment of distribution for FY2015 Third Quarter
October 2015
• Release of FY2015 Full Year Results
November 2015
• Payment of distribution for FY2015 Fourth Quarter
47
Frasers
Commercial
Trust
S u s ta i n a b i l i t y
REPORT
“We strive to incorporate sustainable practices in the
business and operations of the Trust and reduce our
environmental footprint. We believe such environmental
initiatives will create long-term value for the stakeholders”
The Manager recognises that the business and operations
of the Trust have a long-term impact on the environment
and the community. Over the years, the properties have
incorporated various sustainable initiatives as part of
its on-going commitment to reduce its environmental
footprint. These efforts have continued in 2014 to improve
the operational efficiencies and performances of the
properties and the Trust. The Manager also supports
various environmental, educational and art programmes.
The Manager recognises that engaging and nurturing the
community create long-term value for the stakeholders.
En v ir o n me nt
All the properties in Singapore have attained the Green Mark
Gold Award certification by the Building & Construction
Authority of Singapore (BCA).
Central Park has achieved many firsts in environmental
certifications – Central Park was the first commercial
building in Australia to achieve a 4.5 star National Australian
Built Environment Rating System (NABERS) Energy rating
and subsequently, the first premium office building in
Perth to attain a 5 star NABERS Energy base building
rating. Central Park also achieved 4.5 star NABERS Indoor
Environment rating and 3.5 star NABERS Water rating.
Caroline Chisholm Centre is designed to be a cutting-edge
energy efficient new generation building and has a 5 star
NABERS Energy base building rating.
At the Property Council of Australia’s 2014 Western Australia
Property Awards, Central Park took the top commercial
sector honours, having won the Commercial Office Manager
of the Year. This award is in recognition of the team’s
commitment in operating Central Park in an environmentally
responsible manner and maintaining good tenant relations
and engaging the Central Park and public communities.
Energy saving initiatives
Various energy efficient initiatives have been implemented
to reduce and monitor energy consumption at the properties
in Singapore and Australia.
All the properties of the Trust participated in Earth Hour
2014 organised by the World Wide Fund for Nature (WWF)
whereby all non-essential lightings were turned off. This is
our continuous commitment to save and conserve energy
usage and be part of the drive to create awareness towards
a sustainable environment.
Lighting systems have been fitted with lighting controls
to reduce energy usage and motion sensors have been
installed to conserve energy when not in use. For example,
motion sensors and energy saving lighting systems such
as light-emitting diode (LED) lightings have been installed
at various places such as the car parks and staircases at
48
annual
report
2014
the properties in Singapore, the office tower of China
Square Central and the food court and individual tenants’
premises at Alexandra Technopark.
At China Square Central, vendors of the air conditioning
and mechanical ventilation system (ACMV) are contractually
obliged to achieve a good level of performance for the
chillers and cooling tower for better management of energy
consumption. Escalators at China Square Central are also
operated at pre-determined hours to conserve energy whilst
the air-conditioning units are automatically programmed to
be turned off during non-peak hours at 55 Market Street.
At Alexandra Technopark, the air-conditioning system have
be retrofitted which resulted in significant improvement in
energy usage. The energy saving initiatives had resulted
in savings in energy consumption of 10.8%, 1.9% and 9.3%
respectively for China Square Central, 55 Market Street
and Alexandra Technopark in FY2014.
Central Park was the first commercial property in Perth
to incorporate solar photovoltaics (PV) system to provide
renewable energy. The PV system is able to generate
16,000 kilowatt hours of electricity per year. The usage
of solar electricity helps to reduce the carbon footprint
of Central Park as solar electricity is green and does
not release harmful carbon dioxide or other pollutants.
In 2014, the Central Park management team continued
implementing a number of energy saving initiatives. The
more energy efficient T5 lights are now being used at public
and tenant car parks and tenants’ area. The T5 lighting
system will also be implemented on a progressive basis
in the property. A control system with motion sensors was
installed to conserve electricity when the facilities are not
in use and the new system uses less than half of the energy
of the existing system. The lift upgrading works are still in
progress and the newly refurbished lifts will incorporate
destination control and state-of-the-art permanent magnet
motors which are expected to reduce energy consumption
by approximately 30.0%.
As with previous years, carbon credits were purchased as
part of the Carbon Farming Initiative programme to offset
the emissions generated by the base building operations.
The aforesaid programme encourages sustainable farming
and supports landscape restoration projects.
In FY2014, the base building energy consumption at
Central Park reduced by 2.1% as a result of the energy
saving initiatives implemented.
At Caroline Chisholm Centre, T5 and LED lighting have been
installed throughout the property and are controlled by an
environmentally conscious computerised management
system. The Dali Dynalite lighting control system is also used
for an overall effective management energy usage. Solar
panels have also been installed to provide renewable energy.
Water saving initiatives
As part of the efforts towards water conservation, various
water efficiency measures have been implemented in the
properties in Singapore, such as installing water-efficient
fittings and adopting water-efficient flow flush/rates. These
have culminated in China Square Central, 55 Market Street
and Alexandra Technopark being certified Water Efficient
Buildings. At Alexandra Technopark, NEWater (treated used
water) is broadly used for non-potable purposes such as
water for air-conditioning cooling towers, irrigation and firefighting facilities like the fire hydrant and sprinkler system.
China Square Central is also part of the Friends of Water
programme organised by the Public Utilities Board (PUB).
This programme aims to recognise, inspire and encourage
community stewardship of the water resources in Singapore.
49
Frasers
Commercial
Trust
The water saving initiatives had resulted in savings in
water consumption of 2.5%, 10.7% and 15.1% respectively
for China Square Central, 55 Market Street and Alexandra
Technopark in FY2014.
At Central Park, tap flow restrictors, low flow shower
heads, low flush water closets and a park reticulation
weather station have been installed to reduce water
consumption. In addition, works on installing dual flush
toilets, low water use urinals and automatic AAA taps have
continued in 2014. Central Park achieved 12.9% savings
in water consumption in FY2014.
At Caroline Chisholm Centre, water efficient tap-ware
such as the ‘Rada Sensor’ shower controls, rain water
recycling and Greywater have been implemented as part
of the water efficiency measures.
Fostering a green lifestyle and environment
The Manager recognises the importance of cultivating
and incorporating green practices in the daily lives of its
stakeholders. The sustainable practices implemented
by China Square Central and Alexandra Technopark‘s
management offices have been accredited by the Singapore
Environment Council (SEC) under Project: Eco-Office.
These certifications are in recognition of the efforts
taken to include environmental practices in one’s daily
lives, educate and encourage people to preserve the
environment and promote principles and practices of a
responsible office environment.
Posters on green practices are also placed in common
areas as part of the on-going educational initiatives. In
addition, recycling bins for can, plastic and paper have
been placed at various locations across all the properties
to encourage recycling.
At Central Park, the state-of-the-art Ride & Park
facility aims to minimise the tenants’ environmental
footprint, besides promoting a healthier lifestyle. This
is a comprehensive “end of trip” bicycle facility and a
one-stop-shop for cyclists as it provides facilities such
as showers, lockers, a clothes dryer, drying rooms, irons,
hairdryers, work bench and pump for emergency repairs
free of charge for the convenience of the tenants.
REPORT
organisations to facilitate the integration of quality,
environmental and occupational health and safety
management systems. SS506 enables organisations to
develop and implement policies and objectives which take
into account legal requirements and information about
OHS risks, which can be applied to all types and sizes of
organisations and to accommodate diverse geographical,
cultural and social conditions. This is part of the Manager’s
efforts to provide a safe environment in the properties.
“The Manager and the team are
committed towards enhancing and
nurturing community relations to
strengthen ties with the community.
The Manager and the team had
collaborated with tenants, nonprofit organisations and charities
and leveraged on the properties
of the Trust to host these charity,
community and tenant events”
Charity and fund raising Ev e nts
Pink Ribbon Day (October 2013)
For the eighth consecutive year, Central Park hosted
the Pink Ribbon Day in support of the Cancer Council of
Western Australia. This year, the total collection of A$32,708
exceeded the amount raised last year through merchandise
sales in aid of the Cancer Council’s fight against breast
and gynaecological cancers. The funds raised contributed
towards various awareness and prevention programmes,
support services and cancer research.
Oc c u pat ional H e a lth a n d S a f e ty
Occupational health and safety standards (OHS)
The properties in Singapore undergo annual audits to
ensure that they comply with health and safety standards.
All the properties in Singapore comply with the Occupational
Health and Safety Management System (OHSAS) 18001
and SS506 Part 1: 2009 standards. OHSAS 18001 enables
Pink Ribbon Day, Central Park, Perth, Australia
50
annual
report
2014
Step Up for MS, Central Park, Perth, Australia
MS Stair Climb (May 2014)
Central Park hosted the Step Up for MS, one of the iconic
events for the Multiple Sclerosis Society (MS Society)
of Western Australia, for the eighth consecutive year. A
non-profit organisation, the MS Society provides support
and services to those affected with multiple sclerosis,
their families and carers. The vertical challenge saw
more than 1,000 participants scaling the 47-storeys of
Central Park. A total of A$211,510 was raised with the
support from participants and donors. The management
of Central Park also supported the MS Society with a
donation of A$10,000.
Australia’s Biggest Morning Tea (May 2014)
Australia’s Biggest Morning Tea is Cancer Council of
Western Australia’s most popular fundraising event and
the largest, most successful of its kind in Australia. The
Central Park management team is proud to host and be
part of this meaningful event again in 2014 for the benefit
of the Cancer Council of Western Australia. This event
is based on the simple concept of hosting a morning tea
either for friends or colleagues in the fight against cancer.
Following the success of this event in 2013 where a cake
baking competition was also held, the tenants of Central
Park came in full support and donated coffee and cakes
and the proceeds from the sale of A$1,600 were donated to
the Cancer Council. Besides being a charity event, this was
also another occasion for the Central Park management
team to foster closer ties with the tenants.
Australia’s Biggest Morning Tea, Central Park, Perth, Australia
51
Frasers
Commercial
Trust
REPORT
Colours of Our Country, Central Park, Perth, Australia
Co m mu nit y E ve n ts
Colours of Our Country
(September 2013 - October 2013)
The Colours of Our Country exhibition held at the lobby of
Central Park was presented by Rio Tinto which showcased
the works of Aboriginal artists based in the North West
Pilbara region of Western Australia. This annual exhibition
also provided a snapshot of the stories and customs of the
Pilbara region. For the first time, Rio Tinto adopted Central
Park’s ‘Artist in Residence’ concept and had artists working
in the lobby creating paintings during the exhibition. The
exhibition included more than 350 works from 40-plus
artists, and successfully raised A$204,000. This event
was not just an art exhibition as it also created economic
opportunities and helped the on-going sustainability of the
artists, besides providing an outlet for cultural expression.
Gifting Trees (December 2013)
Three gifting trees were placed in the lobby of Central
Park and tenants placed gifts for the benefit of various
charities namely the St Vincent de Pauls Society, The
Salvation Army and The Smith Family. Gifting Trees was
a good opportunity to bring some festive cheer to the
underprivileged during the holiday season. The event
was a tremendous success thanks to the generosity of
the tenants who donated a substantial amount of gifts.
Open House Perth (November 2013)
Following the success of the inaugural event in 2012, Open
House Perth was once again held at Central Park. Open
House Perth is a non-profit organisation which seeks to
enhance the people’s experience in architecture, interiors,
landscape, public art and urban design by providing
programmes and visits to various locations for free. Central
Park opened its doors to various tour groups who were
given a brief on the design and architectural features of
the building and shown various facilities such as the Ride
& Park facility and the conference centre.
Gifting Trees, Central Park, Perth, Australia
52
annual
report
2014
Blood donation drive at China Square Central
(January 2014)
For the second consecutive year, a blood donation drive
was held at China Square Central. Jointly organised by
Cerebos Pacific Limited and China Square Central, the
event was a success where the number of donors exceeded
the total targeted donors. A total of 52 units of blood was
collected during the six hour blood donation drive.
Trading Stories (May 2014)
An exhibition entitled Trading Stories was held at the atrium
of China Square Central which featured the experiences
and personal stories of 6 tradesmen who made a living
plying old trades in Singapore and how they have coped
with the challenges of modernity and the effects on their
trades. These individuals include a traditional goldsmith,
movie poster painter, tukang urut or Malay confinement
lady, Samsui woman, poultry farmer and letter writer. Both
educational and informative, this exhibition sheds light
on some of Singapore’s old trades and aims to remind
the general public of some of the forgotten skills which
have been replaced with modern technology.
Te nan t E v e n ts
Photographer of The Year
(October – November 2013)
In another bid to foster closer tenant engagement,
a photography competition was held for the tenants
of Central Park. The works of the winners of various
categories were displayed at the lobby of Central Park
for the enjoyment of others.
Trading Stories, China Square Central, Singapore
Soiree (May 2014)
In keeping up with its commitment to engage its tenants,
the Central Park management team hosted a soiree at the
lobby of Central Park. This was yet another event to foster
closer ties and relationship between the management
team and tenants. A best dress event was also held and
approximately 270 tenants participated in this event.
EMPLOYEE WELLNESS
The staff of the Manager and Property Manager participated
in various activities of the FCL group such as the Eat With
Your Family Day whereby staff were let off work earlier
to encourage families to eat together and spend time
with their families. The staff also participated in the FCL
Family Day which was held at Resorts World Sentosa S.E.A.
Aquarium where the staff had opportunities to bond with
their families and colleagues.
Winner, Photographer of the Year, Central Park, Perth, Australia
53
Frasers
Commercial
Trust
O v e r v i e w
OF
PROPERTIES
Singap o re
Properties
2 office buildings
1 business space building
Portfolio Values 1
S$1,216.2 million (66.6%)
Portfolio Net Property Income 2
S$46.6 million (51.4%)
A u s tr a li a
Properties
2 office buildings
Portfolio Values 1
S$608.7 million (33.4%)3
Portfolio Net Property Income 2
S$44.0 million (48.6%)
As at 30 September 2014.
For the financial year ended 30 September 2014.
3
Based on the exchange rate of A$1.00 = S$1.1377 as at 30 September 2014.
1
2
54
annual
report
2014
“Good quality and strategically located properties”
The FCOT portfolio comprises five quality commercial properties located
in the core markets of Singapore and Australia. The properties, which
consist of four office buildings and a business space building, are wellconnected and strategically located. As at 30 September 2014, the total
value of the properties is S$1.8 billion.
A ss e t va lu e s 1
ne t p ro p e rty inc o m e 2
22.4%
12.8%
31.7%
21.5%
4.0%
20.6%
25.0%
7.3%
27.6%
27.1%
55 Market Street
55 Market Street
Central Park
Central Park
55
Frasers
Commercial
Trust
P o r t fo l i o
DETAILS
Ch in a Squ ar e C e n tr a l
5 5 m a rke t stre e t
Ale xand ra Te c hno park
Address 18, 20 & 22 Cross Street, China Square
Central, Singapore 048423/2/1
Address 55 Market Street,
Singapore 048941
Address 438A & 438B Alexandra Road,
Singapore 119967/8
Tenure Leasehold 99 years commencing
February 1997
April 1826
August 2009
Net lettable area 372,452 sq ft (34,602 sqm)
Net lettable area 1,045,227 sq ft (97,105 sqm)
Carpark spaces
394
Carpark spaces
Nil
Carpark spaces
905
Purchase price S$390.0 million
Acquisition date
30 March 2006
Acquisition date
22 November 2006
Acquisition date
26 August 2009
Valuation as at
30 September 2014
S$579.0 million
Valuation as at
30 September 2014
S$134.2 million
Valuation as at
30 September 2014
S$503.0 million
Increase in valuation since
purchase
48.5%
purchase
85.1%
purchase
46.9%
Occupancy rate as at
30 September 2014
98.8%
30 September 2014
100.0%1
30 September 2014
96.9%
FY2014 gross revenue
S$30.4 million
S$5.4 million
S$24.7 million
FY2014 net property income
S$20.3 million
S$3.7 million
S$22.6 million
56
annual
report
2014
Ce nt r al Par k
Ca r o line Chisho lm Ce ntre
Address 152-158 St Georges Terrace Perth
WA 6000, Australia
Address Centrelink National Support Office
Block 4 Section 13, Tuggeranong
ACT 2900, Australia
Tenure Freehold
June 2002
Net lettable area 356,840 sq ft (33,152 sqm)2
Carpark spaces
421
Carpark spaces
1,093
Purchase price A$190.0 million (S$234.6 million)3
Purchase price A$191.8 million (S$244.4 million)6
1
ommitted occupancy as at 30 September
C
2014.
Acquisition date
30 March 2006
Acquisition dates
18 June 2007, 13 April 20127
2
epresents Frasers Commercial Trust’s
R
50.0% indirect interest in the asset.
Valuation as at
30 September 2014
A$330.0 million (S$375.4 million)4
Valuation as at
30 September 2014
A$205.0 million (S$233.2 million)4
3
Based on an exchange rate of A$1.00 =
S$1.2347 being the rate at the time of
acquisition.
purchase
73.7%5
purchase
6.9%5
4
Based on the exchange rate of A$1.00 =
S$1.1377 as at 30 September 2014.
5
30 September 2014
88.6%
30 September 2014
100.0%
Based on the valuation denominated in
Australian dollar.
6
S$34.5 million
S$23.9 million
Based on the exchange rates of A$1.00 =
S$1.2533 and A$1.00 = S$1.3028, being the
exchange rates at the time of acquisitions as
at 18 June 2007 and 13 April 2012, respectively.
7
S$24.5 million
S$19.5 million
n 13 April 2012, Frasers Commercial Trust
O
acquired the remaining 50.0% interest in
Caroline Chisholm Centre.
57
Frasers
Commercial
Trust
A s s e t
p r o f i l e s
China s quare cen t ral , s i n ga p o r e
Address
18, 20 & 22 Cross Street,
China Square Central,
Singapore 048423/2/1
Tenure
Leasehold 99 years
commencing February 1997
Total NLA
372,452 sq ft
Office NLA
273,191 sq ft
Retail NLA
99,261 sq ft
Number of Tenants
117
Car Park Lots
394
Acquisition Price
(30 March 2006)
S$ 390.0 million
Market valuation
(30 September 2014)
S$ 579.0 million
Located in the Central Business District, China Square
Central is an office and retail development comprising
a 15-storey commercial office tower with two storeys of
retail podium, two basement levels and two clusters of
heritage shophouses. The commercial office tower had
been refurbished following the completion of the asset
enhancement in FY2013. The shophouses with modernised
Chinese architecture features had been converted into
offices, shops and restaurants. The area along Nankin Mall
had been revitalised with the construction of a covered
linkway following the completion of the China Square
Precinct Master Plan in FY2013.
China Square Central is easily accessible by three mass
rapid transit (MRT) stations, all within walking distance.
China Square Central is approximately a three minute walk
from Telok Ayer MRT station (Downtown Line), six minute
walk from Chinatown MRT station (North East Line) and an
eight minute walk from Raffles Place MRT station (North
South Line). These MRT stations are well connected to other
MRT lines such as the Circle and East West MRT Lines.
58
China Square Central has a diverse tenant mix of 117 office
and retail tenants from a wide variety of trade sectors.
Office tenants include GroupM, Cerebos Pacific, Australia
and New Zealand Banking Group, Straits Developments
and Petra World. Retail tenants such as Sushi Tei, &SONS
Bacaro, Wang Dae Bak, Folks Collective Restaurant, The
Mad Poet Gastrobar, True Fitness and Cold Storage serve
shoppers and office tenants in the vicinity.
China Square Central has attained the Green Mark Gold
Award by the BCA and the Water Efficient Building Award by
the PUB. The sustainable practices implemented by China
Square Central‘s management office have been accredited
by the SEC under Project: Eco-Office. China Square Central
is also part of the Friends of Water programme organised
by the PUB. China Square Central also won Silver in the
Excellent Service Award 2014 (EXSA)1.
Please visit China Square Central at www.chinasquarecentral.
com for more information.
1
XSA is managed by seven industry leading bodies and supported by
E
SPRING Singapore.
annual
report
2014
o p e ratio nal hig hlig hts
2.3
50.0
FY2013
FY2014
Gross revenue
(S$’000)
FY2016
FY2017
FY2018 FY2019 &
beyond
2
2
37
57
34
68,175
10.4
7.9
10.8
138,171
25.4
11.7
26.3
93,277
18.4
6.6
19.6
9,880
2.7
–
2.6
56,285
15.1
–
15.4
7.0
10.7
7.5
–
–
98.8
FY2015
FY2013
FY2014
Occupancy (%)
17,808
20,307
14.0%
FY2013
FY2014
Net property
income (S$’000)
2.2
8,405
186,162
30,404
3.1
2.9
2.7
2.7
2.4
2.3
L e a s e e x p i r y p r o f ile
As at
30 september 2014
Number of leases
expiring
NLA (sq ft)
% of total NLA (office)
% of total NLA (retail)
% of total gross rental
income (office)
% of total gross rental
income (retail)
8.4%
93.5
Asiasons Capital Limited
Total
% of total NLA
15.1
11.6
4.9
28,055
NLA (sq ft)
GroupM Singapore Pte Ltd
56,285
Cerebos Pacific Ltd
43,074
Australia and New Zealand Banking Group
18,108
Limited
Straits Developments Pte Ltd
11,487
Petra World Pte Ltd
10,943
Federal Insurance Company
10,197
True Fitness Pte Ltd
10,056
OCBC Properties Services Pte Ltd
9,066
Cold Storage Singapore (1983) Pte Ltd
8,541
2.6
to p 1 0 te n a n ts
FY2013
FY2014
WALE (years) 1
g ro ss re v e nue m ix
T r a de s e cto r m ix
5.1% 6.9%
% of total gross rental income
Category
30 September 2013
23.9
20.4
Food and Beverage
24.6
2.4
Legal
2.5
0.7
2.2
Others
5.0
5.0
Retail
13.0
Travel
0.3
TOTAL
100.0
30 September 2014
19.1
19.8
24.8
1.5
2.3
1.1
5.2
9.0
4.7
12.2
0.3
100.0
22.6%
65.4%
Office rental
Carpark income
Retail rental
Miscellaneous
income
The weighted average lease expiry (WALE) is
calculated on a gross rental income basis with
respect to the unexpired lease terms of the
existing tenants and is stated as at 30 September.
1
59
Frasers
Commercial
Trust
A s s e t
p r o f i l e s
55 Mar ket S t reet , S in gap o r e
Address
55 Market Street,
Singapore 048941
Tenure
Leasehold 999 years
commencing April 1826
Total NLA
71,796 sq ft
Office NLA
65,607 sq ft
Retail NLA
6,189 sq ft
Number of Tenants
17
Car Park Lots
Nil
Acquisition Price
(22 November 2006)
S$72.5 million
Market Valuation
(30 September 2014)
S$134.2 million
55 Market Street is a 16-storey commercial property with 15
floors of office space and two floors of retail space (including
the basement). Situated in the heart of Raffles Place, 55
Market Street is connected to key transportation nodes via
two MRT lines and close to several bus stops with services
that ply most parts of Singapore. 55 Market Street is within
a five minute walk from Raffles Place MRT Station and ten
minute walk from the Telok Ayer MRT station.
60
55 Market Street houses a diverse range of tenants, mainly
from the consultancy and business services and legal sectors,
such as Corporate Serviced Offices, TKP Singapore In, Jones
Lang LaSalle Property Consultants, Manchester Business
School and QAP Capital.
55 Market Street has obtained the Green Mark Gold Award
by the BCA and Water Efficient Building Award by the PUB.
annual
report
2014
11,894
16.6
TKP Singapore In Pte Ltd
7,578
10.6
Jones Lang LaSalle Property
Consultants Pte Ltd
4,844
6.7
3,601
3,675
2.1%
% of total NLA
5,402
2.7%
NLA (sq ft)
5,259
o p e ratio nal hig hlig h ts
Manchester Business School Pte Ltd
4,844
6.7
QAP Capital Pte Ltd
4,844
6.7
Citigate Dewe Rogerson, i.Mage Pte Ltd
4,768
6.6
Best World Lifestyle Pte Ltd
4,715
6.6
INCA Law LLC
4,715
6.6
Helios Lab Pte Ltd
3,014
4.2
FY2013
FY2014
FY2013
FY2014
2,852
4.0
54,068
75.3
Gross revenue
(S$’000)
Corporate Serviced Offices Pte Ltd
Mr Teh Tarik Pte Ltd
Total
FY2017
5
9
6
–
–
Number of leases
expiring
NLA (sq ft)
1.7
FY2016
1.8
FY2015
100.01
As at
30 September 2014
100.0
FY2013
FY2014
FY2013
FY2014
FY2018 FY2019 &
beyond
14,973
33,864
19,106
–
–
% of total NLA
20.9
47.2
26.6
–
–
% of total gross
rental income
20.9
49.3
27.1
–
–
Net property
income (S$’000)
Occupancy (%)
WALE (years) 2
T r a de s e cto r m i x
5.2%
Category
30 September 2013
Food and Beverage
Legal
30 September 2014
2.2
2.7
49.9
43.4
8.2
8.2
4.2
4.2
13.0
13.4
8.4%
86.4%
Mining / Resources
3.5
6.8
Others
7.0
14.3
12.0
7.0
Office rental
100.0
100.0
Retail rental
TOTAL
1
Miscellaneous
income
Committed occupancy as at 30 September 2014.
The WALE is calculated on a gross rental income
basis with respect to the unexpired lease terms
of the existing tenants and is stated as at 30
September.
2
61
Frasers
Commercial
Trust
A s s e t
p r o f i l e s
Al exandr a t ec h n o park, S i n ga p o r e
Address
438A & 438B Alexandra Road,
Singapore 119967/8
Tenure
Leasehold 99 years
commencing August 2009
Total NLA
1,045,227 sq ft
Business Space NLA
1,045,227 sq ft
Retail NLA
–
Number of Tenants
43
Car Park Lots
905
Acquisition Price
(26 August 2009)
S$342.5 million
Market Valuation
(30 September 2014)
S$503.0 million
Alexandra Technopark is a high-tech business space
comprising two blocks of high-specification buildings
with 905 covered and surface car park lots. The buildings
have large floor plates of up to 76,000 sq ft, high floor-tofloor ceilings and high floor loadings. It is also efficiently
designed with six lift cores in each block that allow subdivision into smaller units for flexible space configurations,
or for each floor to be combined as one, allowing tenants
to locate their entire operations on one floor. Alexandra
Technopark houses a range of amenities such as F&B
outlets, a medical clinic and other support services for the
convenience of both tenants and visitors alike.
Alexandra Technopark is located within the prominent
Alexandra business corridor, a dynamic business hub
where office and industrial uses are integrated. A 15-minute
drive away from the Central Business District, Alexandra
Technopark is within walking distance to the Labrador
Park MRT station on the Circle Line and well-serviced by
public buses linking it to Queenstown and HarbourFront
MRT stations. It is also close to the Science Park, Biopolis
and major expressways.
62
Alexandra Technopark houses many MNCs as its tenants,
especially those in the IT and telecommunications
businesses such as Hewlett-Packard, Microsoft, SAP
Asia, Nokia Solutions and Networks and Dyson Operations.
On 25 August 2014, the master lease with Orrick expired
and was not renewed. Following the expiry, the underlying
multi-tenant leases continued to subsist directly with
the Trust and the Trust receives rents directly from the
underlying tenants, instead of a fixed master lease rent
from Orrick.
Alexandra Technopark has been conferred the Green Mark
Gold Award by the BCA and the Water Efficient Building
Award by the PUB. The sustainable practices implemented
by Alexandra Technopark‘s management office have been
accredited by the SEC under Project: Eco-Office.
annual
report
2014
2.3
1.7
77.3
FY20132
FY2016
FY2017
14
15
21
153,840
14.7
13.8
281,080
26.9
29.0
170,180
16.3
18.8
FY2018 FY2019 &
beyond
4
–
408,147
39.0
38.5
FY20143
Net property
income (S$’000)
0.9
FY2015
FY20132
Gross revenue
(S$’000)
L e a s e e x p i r y p r o f i le 1
As at
30 September 2014
Number of leases
expiring
NLA (sq ft)
% of total NLA
% of total gross
rental income
FY20143
2.21
24,101
18,073
808,001
21,328
2.4
5.9%
24,671
25,016
12.1%
22,000
% of total NLA
48.9
7.4
3.6
3.0
2.8
2.7
2.5
96.9
Omron Asia Pacific Pte Ltd
Sharp-Roxy Sales (Singapore) Pte Ltd
Total
NLA (sq ft)
510,824
77,761
37,696
30,969
29,224
28,697
25,640
100.0
Hewlett-Packard Singapore Pte Ltd
Microsoft Operations Pte Ltd
SAP Asia Pte Ltd
Nokia Solutions and Networks (S) Pte Ltd
Dyson Operations Pte Ltd
Sato Asia Pacific Pte Ltd
Singapore Oxygen Air Liquide Private
Limited
The Great Eastern Life Assurance Co Ltd
22,597
–
–
–
FY20132
FY20143
Occupancy (%)
FY20132
FY20143
WALE (years) 4
T r a de s e cto r m i x
4.1%
2.3%
Category
Amenities
30 September 2013*
2.5
Electronics
Mining / Resources
Others
Shipping / Freight
TOTAL
8.3%
30 September 2014
2.6
3.6
1.0
9.0
64.9
2.4
2.8
3.2
7.2
0.8
2.6
100.0
* Based on the underlying tenants of Alexandra Technopark master lease.
3.5
1.0
9.2
67.4
2.3
2.8
3.1
4.4
0.8
2.9
100.0
85.3%
Office rental
Carpark income
Amenities
rental
Miscellaneous
income
Inclusive of the early renewal of the underlying
leases.
Based on the Alexandra Technopark master lease.
3
On 25 August 2014, the master lease with Orrick
expired and was not renewed. Following the expiry,
the underlying multi-tenant leases continued to
subsist directly with the Trust.
4
The WALE is calculated on a gross rental income
basis with respect to the unexpired lease terms of the
existing tenants and is stated as at 30 September.
1
2
63
Frasers
Commercial
Trust
A s s e t
p r o f i l e s
Ce n tr al park, p ert h , au s t r a li a
Address
152–158 St Georges Terrace
Perth WA 6000, Australia
Tenure
Freehold
Total NLA (50.0% interest)
356,840 sq ft
Office NLA
347,060 sq ft
Retail NLA
9,780 sq ft
Number of Tenants
22
Car Park Lots
421
Acquisition Price
(30 March 2006)
A$190.0 million
(S$234.6 million)1
Market Valuation
(30 September 2014)
A$330.0 million
(S$375.4 million)2
Central Park is strategically located in the heart of the
Central Business District of Perth, with a prominent
frontage onto St Georges Terrace – Perth’s premier business
address. The 47-storey Premium Grade office tower was
constructed to high specifications and is an iconic Perth
landmark. Central Park has panoramic river and cityscape
views, surrounded by 5,000 sq m of landscaped parkland
and is equipped with excellent facilities such as a 130
seat theatrette, seminar/meeting rooms, full audiovisual
conferencing facilities, 24 hours security service, centralised
mail facility, concierge services, on site gymnasium and
fully equipped cyclists’ facilities.
Central Park has unparalleled road, rail and bus access
including convenient access to a range of cafes, restaurants
and a secure underground car park for its visitors and tenants.
Central Park has quality tenants and a diversified mix of
Australian and multinational companies. The 22 tenants
include Hamersley Iron Pty Limited (a wholly-owned subsidiary
64
of Rio Tinto), BHP Billiton Iron Ore, Government Employees
Superannuation Board, Westpac Banking Corporation and
PF Lawyers (DLA Piper).
Central Park was the first commercial building in Australia
to achieve a 4.5 star NABERS Energy rating and the first
premium office building in Perth to attain a 5 star NABERS
Energy base building rating. Central Park also has a 4.5 star
NABERS Indoor Environment rating and 3.5 star NABERS
Water rating. At the Property Council of Australia’s 2014
Western Australia Property Awards, Central Park took the
top commercial sector honours, having won the Commercial
Office Manager of the Year.
Please visit Central Park at www.central-park.com.au for
more information.
Based on an exchange rate of A$1.00 = S$1.2347 being the exchange rate
at the time of acquisition.
2
Based on an exchange rate of A$1.00 = S$1.1377 as at 30 September 2014.
1
annual
report
2014
FY2016
FY2017
5
3
4
10,014
2.8
3.2
35,002
9.8
9.4
39,638
11.1
15.2
93.5
FY2015
FY2018 FY2019 &
beyond
6
10
172,762
48.4
49.5
FY2013
10.9
1.9
1.5
9.4
12.8
58.6
1.1
2.5
1.3
100.0
FY2014
Net property
income (S$’000)
FY2014
FY2013
FY2014
WALE (years) 1
30 September 2013 30 September 2014
Food and Beverage
Legal
Mining / Resources
Others
Retail
TOTAL
FY2013
58,867
16.5
22.7
Occupancy (%)
Category
24,504
FY2014
Gross revenue
(S$’000)
As at
30 September 2014
Number of leases
expiring
NLA (sq ft)
% of total NLA
% of total gross
rental income
FY2013
26,448
5.1
3.9
3.2
2.5
2.4
2.1
2.0
83.8
7.4%
4.2
18,161
14,210
11,434
8,755
8,454
7,535
7,110
299,141
6.8%
34,483
% of total NLA
35.6
21.5
5.5
88.6
NLA (sq ft)
126,996
76,734
19,752
37,005
Hamersley Iron Pty Ltd (Rio Tinto)
BHP Billiton Iron Ore Pty Ltd
Government Employees
Superannuation Board (WA)
Westpac Banking Corporation
PF Lawyers Pty Ltd (DLA Piper)
IOOF Service Co Pty Ltd
Japan Australia LNG (MIMI) Pty Ltd
Servcorp (WA) Pty Ltd
Department of FACSIA
Jones Lang LaSalle (WA) Pty Ltd
Total
3.7
14.3%
12.8
2.0
1.6
10.1
5.8
62.7
1.0
2.7
1.3
100.0
10.0%
3.0%
72.7%
1
Office rental
Carpark income
Retail rental
Miscellaneous
income
he WALE is calculated on a gross rental income
T
basis with respect to the unexpired lease terms
of the existing tenants and is stated as at 30
September.
65
Frasers
Commercial
Trust
A s s e t
p r o f i l e s
car ol ine C h i s h o l m cen t r e , ca n b e r r a , a us t r a li a
Address
Centrelink National Support
Office Block 4 Section 13,
Tuggeranong ACT 2900 Australia
Tenure
Leasehold 99 years commencing
June 2002
Total NLA
433,182 sq ft
Office NLA
433,182 sq ft
Retail NLA
Nil
Number of Tenants
1
Car Park Lots
1,093
Acquisition Price
A$191.8 million
(S$244.4 million)1
Market Valuation
(30 September 2014)
A$205.0 million
(S$233.2 million)2
Caroline Chisholm Centre is located within the core of the
Tuggeranong Town Centre, one of four town centres within
the city of Canberra, Australia’s capital city and the location
of the Federal Parliament House.
The five-storey Grade A contemporary office complex is
designed as a cutting-edge energy efficient new generation
building, with eco-friendly features such as grey and rainwater
collection, solar panels and double glazed windows. It is also
equipped with various amenities such as conference facilities,
auditorium, amphitheatre/ television studio, gymnasium and
café with commercial kitchen. It is specifically designed as
the National Headquarters of the Department of Human
Services, the Australian Government Agency charged with
the social services of the country.
It is fully leased to the Commonwealth Government of Australia,
represented by the Department of Human Services. The initial
lease term is 18 years commencing 5 July 2007 with 3.0%
annual rental increment. The lease structure and long WALE
of approximately 10.8 years as at 30 September 2014 provides
organic growth and stable income stream to the portfolio.
Caroline Chisholm Centre has a 5 star NABERS Energy base
building rating.
Based on the exchange rates of A$1.00 = S$1.2533 and A$1.00 = S$1.3028, being the exchange rates at the time of acquisitions as at 18 June 2007
and 13 April 2012, respectively.
2
Based on an exchange rate of A$1.00 = S$1.1377 as at 30 September 2014.
1
66
annual
report
2014
433,182
100.0
5.7%
9.2%
21,452
% OF TOTAL NLA
100.0
23,878
NLA (SQ FT)
433,182
25,334
AS AT 30 SEPTEMBER 2014
Commonwealth of Australia as
represented by Centrelink
TOTAL
FY2013
FY2014
FY2013
19,471
TENANT PROFILE
–
–
–
–
–
–
–
–
–
–
–
–
FY2018 FY2019 &
beyond
–
1
–
–
–
433,182
100.0
100.0
Gross revenue
(S$’000)
FY2014
Net property
income (S$’000)
10.8
FY2017
11.8
FY2016
100.0
FY2015
100.0
As at
30 September 2014
Number of leases
expiring
NLA (sq ft)
% of total NLA
% of total gross
rental income
FY2013
FY2014
FY2013
FY2014
Category
30 September 2013
30 September 2014
100.0
100.0
TOTAL
100.0
100.0
Occupancy (%)
WALE (years) 1
1.6%
98.4%
Office rental
Miscellaneous income
1
he WALE is calculated on a gross rental
T
income basis with respect to the unexpired
lease terms of the existing tenant and is stated
as at 30 September.
67
Frasers
Commercial
Trust
RISK
MANAGEMENT
En t e r p r ise -w i de R i s k M a n ag e m e n t
The objective of enterprise-wide risk management (ERM)
is to identify key risks and put in place controls, and to
allocate appropriate resources to proactively manage
the identified risks. Enterprise-wide risk reporting is
facilitated through a web-based Corporate Risk Scorecard
system which enables the reporting of risks and risk
status on a common platform in a consistent and cohesive
manner. The ERM framework covers key areas such as
investment, financial management and operating activities.
Risks are reported and monitored using a Risk Scorecard
which captures risks, mitigating measures, timeline for
action items and risk ratings. Where applicable, Key Risk
Indicators (KRIs) are established to monitor risks. The
Risk Scorecard and KRIs are presented in the form of a
Key Risk Dashboard and reviewed by the Management and
Audit, Risk and Compliance Committee (ARC Committee)
on a regular basis.
Risk tolerance statements setting out the nature and extent
of significant risks which the Manager is willing to take
in achieving its strategic objectives in respect of FCOT
have been formalised and adopted. The risk tolerance
statements are reviewed periodically.
At the end of the financial year, an annual ERM validation
exercise is held where Management provide assurance to
the ARC Committee that the system of risk management
is adequate and effective as at the end of the financial
year to address risks which are considered relevant and
material to the operations.
Ke y R isk s in FY 2 0 1 4
Investment Risk
All investment proposals are evaluated against
a comprehensive set of investment criteria and due
diligence is carried out to mitigate potential investment
risks. The evaluation process for all investment activities
includes consideration of the location, quality of tenants,
building condition, environmental impact, competitive
landscape, investment return, long-term sustainability and
growth potential.
Regulatory Risks
To mitigate the risk of non-compliance with applicable
laws and regulations and any changes thereof, processes
are in place to monitor compliance with relevant policies
and procedures, and staff are updated regularly on latest
developments in relevant laws and regulations through
training and attending talks and briefings.
68
Interest Rate Risk
The Manager proactively manages interest rate risk by
adopting a policy of fixing interest rates for a portion of its
outstanding borrowings via the use of derivative financial
instruments or other suitable financial products. Interest
rate derivative instruments are used for the purpose of
hedging interest rate risk and managing the portfolio of
fixed and floating rate.
Funding and Liquidity Risks
The Manager actively manages the Trust’s capital structure.
It ensures that the gearing of the Trust is at a prudent
level and adheres to the gearing ratio requirements under
the relevant loan facility agreements and property fund
guidelines in the Code on Collective Investment Schemes
issued by the Monetary Authority of Singapore. The debt
maturities of the loan facilities are spread out to mitigate
financing risks. In addition, a sufficient level of working
capital is maintained to meet the requirements of the
Trust’s operations.
Foreign Currency Risk
The Trust is exposed to foreign exchange risk as a result
of its investments in Australia. It is the Trust’s policy
to hedge anticipated foreign currency income net of
anticipated payments required in the same currency, from
its overseas investments at least six months forward by
using appropriate foreign currency financial instruments.
FCOT uses these instruments solely for hedging actual
underlying foreign exchange requirements in accordance
with hedging limits set by the ARC Committee and Board
and does not engage in trading of foreign exchange
derivatives. A portion of the investment in overseas assets
is hedged naturally to the extent that related borrowings
are taken up in the relevant foreign currency. The net
positions of the foreign exchange risk of investments in
overseas assets are not hedged as such investments are
long term in nature.
Operational Risks
FCOT has established and strictly adheres to a set of
standard operating procedures designed to identify,
monitor, manage and report operational risks associated
with the day-to-day management and maintenance of the
Trust’s properties. These include actively managing lease
renewals and new leases to minimise rental void, as well
as monitoring rental arrears and property expenses. The
Manager practises prudent lease management to prevent
disproportionate levels of vacancy in any one year by
staggering the lease terms of properties within its portfolio.
annual
report
2014
Insurances are in place to mitigate losses to assets
and business due to unforeseen events. The operating
procedures are also reviewed regularly and business
continuity plans tested to ensure their continued relevance
and effectiveness.
Credit Risk
Credit risk is the potential financial loss resulting from
failure of tenants to fulfill their payment obligations.
In order to mitigate credit risk, credit evaluations are
performed before the lease agreements are entered into
and security deposits are collected from tenants. Arrears
from tenants are monitored on an ongoing basis.
Fraud Risk
Whistle blowing policy and purchasing/procurement
approval process and procedures are in place to mitigate
fraud risk. These are subject to regular internal audit
reviews scheduled based on the internal audit work plans
approved by the ARC Committee.
Human Capital Risk
The Manager has in place a career planning and development
system and conducts regular remuneration and benefits
benchmarking to attract and retain appropriate talent for
the business. Regular training is also provided to upgrade
the skills of the staff.
69
CG
Corporate governance
annual
report
2014
CORPORATE
GOVERNANCE
INTRODUCTION
Frasers Centrepoint Asset Management (Commercial) Ltd. (the Manager), as manager of Frasers Commercial Trust (FCOT),
is committed to high standards of corporate governance in the business and operations of the Manager, FCOT and their
respective subsidiaries so as to protect the interest of, and enhance the value of Unitholders’ investments in, FCOT.
FCOT is a real estate investment trust (REIT) listed on the Main Board of the Singapore Exchange Securities Trading Limited
(the SGX-ST) and the Manager is a wholly-owned subsidiary of Frasers Centrepoint Limited (FCL).
The Manager’s commitment to high standards of corporate governance is spearheaded by a highly-qualified Board of
Directors of the Manager (the Board), and supported by experienced and qualified Management.
The Manager has general powers of management over the assets of FCOT. The Manager’s key responsibility is to manage
FCOT’s assets and liabilities for the benefit of Unitholders with a focus to deliver a stable and sustainable distribution to
Unitholders and where appropriate, enhance the values of existing properties and increase the property portfolio over time.
The other functions and responsibilities of the Manager include preparing annual asset plans and undertaking regular
individual asset performance analysis and market research analysis, managing finance functions relating to FCOT (which
includes capital management, treasury, co-ordination and preparation of consolidated budgets) and supervising the
property managers which perform the day-to-day property management functions for FCOT’s properties, namely (i) China
Square Central, 55 Market Street and Alexandra Technopark in Singapore and (ii) Central Park and Caroline Chisholm
Centre in Australia.
The Manager holds a Capital Markets Services Licence (CMS Licence) issued by the Monetary Authority of Singapore (MAS)
to carry out REIT management activities as required under the licensing regime for REIT managers that came into effect
on 1 August 2008.
The Manager ensures that the business of FCOT is carried on and conducted in a proper and efficient manner adhering
to the principles and guidelines of the Code of Corporate Governance 2012 (the CG Code) and other applicable laws and
regulations, including the listing rules of SGX-ST, the Code on Collective Investment Schemes (the Code on CIS) and the
Securities and Futures Act (the SFA).
This corporate governance report (CG Report) provides an insight on the Manager’s corporate governance framework and
practices in compliance with the principles and guidelines of the CG Code. As FCOT is a listed REIT, not all principles of the
CG Code may be applicable to FCOT and the Manager. Any deviations from the CG Code are explained.
BOARD MATTERS
Principle 1: The Board’s Conduct of Affairs
The composition of the Board as at 30 September 2014 is as follows:
Dr Chua Yong Hai
Low Chee Wah
Chay Wai Chuen
Chia Khong Shoong
Lim Ee Seng
Tan Guong Ching
Christopher Tang Kok Kai
Chairman, Non-Executive
Chief Executive Officer
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Independent
Non-Independent
Independent
Non-Independent
Non-Independent
Independent
Non-Independent
The Board oversees the business affairs of FCOT and the Manager, and assumes responsibility for their strategic direction and
plans. In carrying out its responsibilities, the Board is involved strategically in the establishment of performance objectives for
both FCOT and the Manager, financial planning, budget creation and monitoring, material operational initiatives, investment
and asset enhancement initiatives, financial and operational performance reviews, the establishment of risk management
practices and risk monitoring, and establishment and monitoring of corporate governance and compliance practices.
71
Frasers
Commercial
Trust
CORPORATE
GOVERNANCE
The Board meets at least once every quarter and on such other occasions that necessitate their involvement. However,
engagement and communication between the Chief Executive Officer (CEO) and Management with members of the Board
are carried out regularly throughout the financial year, thereby allowing the Board continuous strategic oversight over the
activities of FCOT and the Manager. If required, time is set aside after scheduled Board meetings for discussions amongst
the members of the Board without the presence of Management, in line with the guidelines of the CG Code, as this facilitates
a more effective check on Management.
The Board is assisted in its corporate governance and risk management responsibilities by the Audit, Risk and Compliance
Committee (ARC Committee). Separate committees will be considered if required to assist the Board in carrying out its
role more effectively.
Newly-appointed members of the Board are required to undergo orientation to familiarise themselves with FCOT’s
business, strategic plans and objectives, the regulatory environment in which FCOT operates and the Manager’s corporate
governance practices.
The Board is regularly updated on new laws affecting FCOT’s business, as well as changes in applicable regulations.
The Company Secretary facilitates such orientation and assists with the professional development of the Board and its
members. During the year, the Board was briefed and/or updated on (1) MAS’ proposed enhancements to the regulatory
regime governing REITs and REIT managers, (2) the SGX-ST Sustainability Reporting Guide which was updated on 27 June
2014 and (3) the revised notices to capital markets intermediaries on prevention of money laundering and countering the
financing of terrorism.
In addition to talks conducted by relevant professionals, members of the Board are encouraged to attend relevant courses
and seminars so as to keep themselves updated on developments and changes in FCOT’s operating environment, and to be
members of the Singapore Institute of Directors (SID) and for them to receive journal updates and training from SID to stay
abreast of relevant developments in financial, legal and regulatory requirements, and the business environment and outlook.
The number of Board and ARC Committee meetings held for the financial year from 1 October 2013 to 30 September 2014,
as well as the attendance of each Board member at these meetings, are set out below:
Meetings held during the financial year
ended 30 September 2014
Board
Meetings*
4
ARC Committee
Meetings
4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
NA
4/4
NA
NA
3/4
4/4
Attendees
Dr Chua Yong Hai
Low Chee Wah
Chay Wai Chuen
Chia Khong Shoong
Lim Ee Seng
Tan Guong Ching
* Excludes other meetings attended by Directors with Management
To ensure that business and operational efficacy is maintained without compromising the standard of corporate governance,
a Manual of Authority (the MOA) approved by the Board in consultation with the CEO is implemented. The MOA sets out the
levels of authorisation and their respective approval limits for a range of transactions, including but not limited to investments,
asset enhancement initiatives, and operating and capital expenditures. Transactions and matters which require the Board’s
approval are clearly set out in the MOA.
Principle 2: Board Composition and Guidance
The Board comprises seven members, of whom three are Independent Non-Executive Directors. The CEO is the only Executive
Director on the Board. The rest of the Board members are non-executive Directors.
72
annual
report
2014
The Board is of the view that the current size and composition of the Board is appropriate for the scope and nature of the
operations of the Manager and FCOT and facilitates effective decision-making. In line with the CG Code, the Board is also of
the view that the current size of the Board is not so large as to be unwieldy. In this regard, the Board has taken into account
the requirements of the business of the Manager and FCOT and the need to avoid undue disruptions from changes to the
composition of the Board and the ARC Committee. The Board considers that its present size, composition and balance
between Executive, Non-Executive and Independent Directors, is appropriate and allows for a balanced exchange of views,
robust deliberations and debates among members, and effective oversight over Management. The current composition
gives the Board the ability to consider and make decisions objectively and independently on issues relating to FCOT and the
Manager. Under the current composition, no one individual or group dominates the Board’s decisions or its process. The
composition of the Board is reviewed regularly to ensure that the Board has the appropriate size and mix of expertise and
experience. There is a strong and independent element on the Board.
Directors exercise their judgment independently and objectively in the interest of FCOT and the Manager. The Board reviews
and assesses annually the independence of its directors based on the definitions and guidelines of independence set out in
the Code of Corporate Governance. In its review for the financial year ended 30 September 2014, the Board determined the
following with respect to the independence of directors:
Dr Chua Yong Hai
Independent
Low Chee Wah
Non-Independent
Chay Wai Chuen
Independent
Chia Khong Shoong
Non-Independent
Lim Ee Seng
Non-Independent
Tan Guong Ching
Independent
Non-Independent
With the background, skills, experience and core competencies of its members, the Board collectively has the critical skills
and expertise needed in the strategic direction and planning of the business of FCOT. The diversity of skills, expertise and
experience of its members bring to the Board independent and objective perspective thereby enabling balanced and wellconsidered decisions to be made. Particulars of Directors are set out on pages 18 to 21.
Principle 3: Chairman and Chief Executive Officer
The roles of the Chairman and the CEO are separate to ensure an appropriate balance of power and authority and the levels
of authority and the approval limits under the MOA reflects such a separation. This separation of roles promotes greater
accountability of Management and allows the Board to exercise its independence in its oversight of and deliberations with
Management. The Chairman, who is an independent and a non-executive director, is not related to the CEO. There is no
business relationship between him and the CEO.
The Chairman leads the Board and ensures its effectiveness by, among other things, steering effective, productive and
comprehensive discussions amongst Board members and the Management team on strategic, business and other key
issues pertinent to the business and operations of FCOT and the Manager. With the full support of the Board, the Company
Secretary and Management, the Chairman spearheads the Manager’s drive to promote, attain and maintain high standards
of corporate governance and transparency.
The CEO has full executive responsibilities over the business direction and operations of the Manager, and is responsible
for the execution of the Board’s adopted strategies and policies. The CEO leads the Management team in the management
of FCOT and is accountable to the Board for the conduct and performance of the Management team.
Principle 4: Board Membership
The Board does not consider it necessary to establish a nominating committee. The Board retains the responsibility for the
identification, review and appointment of suitable candidates to join the Board as its members, taking into consideration (a)
such candidate’s skill, experience and ability to perform, (b) the needs of the Board, (c) such candidate’s other commitments
and (d) the independence of the candidate from FCOT and the Manager. Directors of the Manager are not subject to periodic
retirement by rotation.
73
Frasers
Commercial
Trust
CORPORATE
GOVERNANCE
The Board proactively seeks to maintain an appropriate balance of expertise, skills and attributes among the Directors,
and this is reflected in the diversity of backgrounds and competencies of the current Directors. Such competencies include
banking, finance, accounting and other relevant industry knowledge, entrepreneurial and management experience, and
familiarity with regulatory requirements and risk management. This benefits Management as it allows them to tap on the
broad range of views and perspectives and the breadth of experience of the Directors.
The CG Code requires listed companies to fix the maximum number of Board representations on other listed companies
that their directors may hold and to disclose this in their annual report. Details of such directorships and other principal
commitments of our Directors may be found on pages 18 to 21. In determining whether each Director is able to devote
sufficient time to discharge his duties, the Board has taken cognizance of the CG Code requirement, but is of the view that
its assessment should not be restricted to the number of board representations of each Director – and their respective
principal commitments – per se. Holistically, the contributions by the Directors to and during meetings of the Board and
the ARC Committee as well as their attendance at such meetings should also be taken into account.
Principle 5: Board Performance
The Board has implemented a process to assess the performance of the Board and its decision-making processes. Members
of the Board are required to assess the Board’s performance, which includes areas such as the Board’s composition and
processes, effectiveness in its management of FCOT’s performance, and such other areas which the Board is of the view
that improvements are required.
The findings of the assessment are reviewed by the Board with a view to improving its overall effectiveness in carrying out
its role. Based on such periodic reviews, the Board is of the view that it is operating effectively and each of its members is
contributing to its overall effectiveness and commits to maintain such effectiveness.
Principle 6: Access to Information
It is the Management’s commitment that the Board and the ARC Committee are provided with complete, timely and adequate
information, both prior to Board meetings and ARC Committee meetings and on an ongoing basis so as to allow the Board and
the ARC Committee to discharge their duties. Prior to each Board meeting and ARC Committee meeting, papers on matters
to be discussed are sent to Board members and ARC Committee members ahead of such meetings, so that such matters
may be considered and discussed thoroughly and fully, prior to the making of any decision. Management may be requested
to attend Board meetings so as to be at hand to answer any questions or contribute to any discussions. Presentations are
made by Management at the Board meetings to facilitate deliberations and discussions.
For matters which require the Board’s decision outside such meetings, board papers will be circulated through the Company
Secretary for the Board’s consideration, with discussions and clarifications taking place between members of the Board
and Management, before approval is granted.
Directors at their discretion may seek and obtain independent professional advice, where necessary, in the furtherance of
their duties, and any expenses and costs associated thereto are borne by the Manager.
Directors have separate and independent access to the Company Secretary, who attends all Board meetings and advises the
Board on relevant corporate governance issues. The Company Secretary ensures compliance with Board procedures and
relevant rules and regulations. Under the direction of the Chairman, the Company Secretary is responsible for ensuring good
information flow between the Board and Management. Direct communication between the CEO, the Chairman and members
of the Board is encouraged by the Board, and the Board may at its discretion communicate with Management if they so wish.
REMUNERATION MATTERS
Principle 7: Procedures for Developing Remuneration Policies
Principle 8: Level and Mix of Remuneration
Principle 9: Disclosure on Remuneration
The remuneration of Directors, the CEO and employees of the Manager are paid by the Manager and not by FCOT.
For the financial year ended 30 September 2014, the Manager adopted the remuneration policies and practices of FCL, which
has a remuneration committee (the FCL RC) that oversees, inter alia, the framework of remuneration, compensation and
74
annual
report
2014
benefits for key executives of the Manager, including the CEO. The level and mix of remuneration and benefits, policies and
practices of the FCL group, which includes the Manager, are reviewed by the FCL RC on an annual basis. In undertaking
such reviews, the FCL RC takes into consideration the performance of the Manager as part of the FCL group, and that of
individual employees. It also reviews and approves the framework for salary reviews, performance bonuses and incentives
for senior managers of the Manager as part of the FCL group-wide review.
The Manager’s compensation framework comprises fixed pay and short term and long-term incentives. Executive remuneration
is linked to, inter alia, individual performance based on an annual appraisal of each individual employee of the Manager.
The remuneration of non-executive Directors takes into account their level and quality of contribution and their respective
responsibilities, including attendance and time spent at Board meetings and Board Committee meetings. Save for the CEO,
Directors are paid a basic fee and attendance fees for attending Board meetings. The CEO does not receive Directors’ fees.
Non-Executive Directors who perform services through Board Committees are paid additional basic and attendance fees for
such services. No Director decides his own fees. Directors’ fees are reviewed periodically to benchmark such fees against
the amounts paid by other major listed companies.
The Directors’ fees for the financial year ended 30 September 2014 are shown in the table below. –
Director
Dr Chua Yong Hai (Chairman and member of ARC Committee)
Chay Wai Chuen (Chairman, ARC Committee)
Chia Khong Shoong
Lim Ee Seng
Tan Guong Ching (Member, ARC Committee)
Christopher Tang Kok Kai (Member, ARC Committee)
1
FY2014
SGD 84,000
SGD 54,000
SGD 39,0001
SGD 39,0001
SGD 49,000
SGD 49,0001
Directors’ fees are paid to FCL Management Services Pte. Ltd.
ACCOUNTABILITY AND AUDIT
Principle 10: Accountability
The Manager prepares the financial statements of FCOT in accordance with the recommendations of the Statement of
Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” (RAP 7) issued by the Institute of Singapore
Chartered Accountants and the applicable requirements of the Code on CIS issued by the MAS and the provisions of the
Trust Deed. RAP 7 requires the accounting principles to generally comply with the recognition and measurement principles
of Singapore Financial Reporting Standards prescribed by the Accounting Standards Council. The Board, with the support of
Management, is responsible for providing a balanced and understandable assessment of FCOT’s performance, position and
prospects. Quarterly and annual financial reports and other material information are disseminated to Unitholders through
announcements released via SGXNET, and where applicable, media releases and analysts’ briefings. Such financial reports
are reviewed by the Board before dissemination.
Principle 11: Risk Management and Internal Controls
The Manager has established a sound system of risk management and internal controls comprising procedures and
processes to safeguard FCOT’s assets and Unitholders’ interests. The ARC Committee reviews and reports to the Board
on the adequacy of such controls, including financial, compliance, operational and information technology controls, and
risk management procedures and systems, taking into consideration the recommendations of both internal and external
auditors.
Internal Controls
The ARC Committee, through the assistance of internal and external auditors, reviews and reports to the Board on the
adequacy of the Manager’s system of controls, including financial, compliance, operational and information technology
controls. In assessing the effectiveness of internal controls, the ARC Committee ensures primarily that key objectives
are met, material assets are properly safeguarded, fraud or errors in the accounting records are prevented or detected,
accounting records are accurate and complete, and reliable financial information is prepared in compliance with applicable
internal policies, laws and regulations.
75
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Commercial
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CORPORATE
GOVERNANCE
Risk Management
The Board, through the ARC Committee, reviews the adequacy of the Manager’s risk management framework to ensure that
robust risk management and mitigating controls are in place. The Manager has adopted an enterprise-wide risk management
(ERM) framework to enhance its risk management capabilities. Key risks, control measures and management actions are
continually identified, reviewed and monitored as part of the ERM process. Financial and operational key risk indicators are in
place to track key risk exposures. Apart from the ERM process, key business risks are thoroughly assessed by Management
and each significant transaction is comprehensively analysed so that Management understands the risks involved before it
is embarked upon. An outline of the Manager’s ERM framework and progress report is set out on pages 68 to 69.
Periodic updates are provided to the ARC Committee on FCOT’s and the Manager’s risk profile. These updates would involve
an assessment of FCOT’s and the Manager’s key risks by risk categories, its current status, the effectiveness of any mitigating
measures taken, and any proposals and plans by Management to manage such risks.
In addition to the ERM framework, a comfort matrix of key risks, by which relevant material financial, compliance and
operational (including information technology) risks of FCOT and the Manager have been documented to assist the Board
to assess the adequacy of the existing internal controls. The comfort matrix is prepared with reference to the strategies,
policies, processes, systems and reporting processes connected with the management of such key risks and presented to
the Board and the ARC Committee. Risk tolerance statements setting out the nature and extent of significant risks which
the Manager is willing to take in achieving its strategic objectives have been formalised and adopted.
The Board has received assurance from the CEO and the Financial Controller of the Manager that as at 30 September 2014:
(a) the financial records of FCOT have been properly maintained and the financial statements for the year ended
30 September 2014 give a true and fair view of FCOT’s operations and finances;
(b) the system of internal controls in place for FCOT is adequate and effective as at 30 September 2014 to address financial,
operational, compliance and information technology risks which the Manager considers relevant and material to
FCOT’s operations; and
(c) the risk management system in place for FCOT is adequate and effective as at 30 September 2014 to address risks
which the Manager considers relevant and material to FCOT’s operations.
Opinion of the Board on Internal Controls and Risk Management Framework
Based on the internal controls established and maintained by the Manager, work performed by internal and external auditors,
reviews performed by Management and the ARC Committee and assurance from the CEO and the Financial Controller of
the Manager, the Board, with the concurrence of the ARC Committee, is of the opinion that the internal controls in place for
FCOT, were adequate and effective as at 30 September 2014 to address financial, operational, compliance and information
technology risks, which the Manager considers relevant and material to FCOT’s operations.
Based on the risk management framework established and assurance from the CEO and the Financial Controller of the
Manager, the Board is of the view that the risk management system in place for FCOT was adequate and effective as at
30 September 2014 to address risks which the Manager considers relevant and material to FCOT’s operations.
The Board notes that the system of internal controls and risk management provides reasonable, but not absolute, assurance
that the Manager will not be adversely affected by any event that could be reasonably foreseen as it works to achieve its
business objectives.
In this regard, the Board also notes that no system of internal controls and risk management can provide absolute assurance
against the occurrence of material errors, poor judgment in decision making, human error, losses, fraud or other irregularities.
Principle 12: Audit Committee
The ARC Committee is governed by written terms of reference defining its scope of authority and in accordance with such
terms, is authorised to investigate any matter in connection with FCOT and the Manager. The ARC Committee has full access
to, and has the full cooperation of, Management, with full authority and discretion to invite any Director or employee of the
Manager to attend its meetings. The ARC Committee is able to call upon the Manager’s resources to enable it to discharge
its functions effectively.
76
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2014
The ARC Committee’s responsibilities include:
• reviewing and monitoring the effectiveness of the Manager’s internal controls, including financial, compliance and risk
management controls and procedures;
• monitoring the integrity of financial information, including all quarterly and full year financial reports and audit reports;
• ensuring that procedures are in place for compliance with applicable rules and legislation, such as the Listing Manual,
the Code on CIS including the Property Funds Appendix, and the SFA;
• reviewing the adequacy, independence, effectiveness, objectivity and fees of external auditors and recommending to the
Board any replacement, appointment or reappointment of such external auditors;
• reviewing the adequacy and effectiveness of the internal audit function, including its resources, audit plans and the scope
and effectiveness of the internal audit procedures; and
• reviewing interested person transactions to ascertain compliance with internal procedures and provisions of applicable
laws and regulations.
In performing its functions, the ARC Committee meets with the internal and external auditors and reviews the internal and
external audit plans for FCOT and the Manager and the assistance given by Management to the auditors. All audit findings
and recommendations are presented to the ARC Committee for discussion. In addition, updates on changes in accounting
standards and treatment are prepared by external auditors and circulated to members of the ARC Committee periodically.
The ARC Committee comprises all Non-Executive Directors, the majority of whom, including the Chairman, are independent:
Chay Wai Chuen
Dr Chua Yong Hai
Tan Guong Ching
Chairman
Member
Member
Member
The separation of the roles of the Chairman of the Board and the Chairman of the ARC Committee ensures greater
independence of the ARC Committee in the discharge of its duties. This is also with a view to increasing its effectiveness
in assisting the Board in the discharge of its statutory and other responsibilities in the areas of internal controls, financial
and accounting matters, compliance and risk management.
Members of the ARC Committee collectively possess the accounting and related financial management, expertise and
experience required for the ARC Committee to discharge its responsibilities and assist the Board in its oversight over
Management in the design, implementation and monitoring of risk management and internal control systems.
External Auditors
Ernst and Young LLP (E&Y) was re-appointed pursuant to the approval of the Unitholders on 22 January 2014 as external
auditors of FCOT. Taking into consideration (i) the resources and experience of E&Y, (ii) the terms of E&Y’s engagement, (iii)
the size and complexity of FCOT and its subsidiaries, (iv) the number and the experience of E&Y’s supervisory and professional
staff assigned to the audit of FCOT, (v) the fees paid to E&Y for audit and non-audit services performed by E&Y, and (vi)
the independence and objectivity of E&Y based on their performance to date, the ARC Committee is of the view that E&Y is
suitable to continue with its appointment as external auditors of FCOT and recommends to the Board its re-appointment.
The ARC Committee will continue to review the performance and the suitability of E&Y as external auditors.
E&Y has attended the ARC Committee meetings every quarter for the financial year ended 30 September 2014, and where
appropriate has met with the ARC Committee without the presence of Management to discuss their findings, if any.
The Manager confirms that FCOT complies with Rules 712 and 715 of the Listing Manual in relation to the appointment of
E&Y as the auditor of FCOT.
77
Frasers
Commercial
Trust
CORPORATE
GOVERNANCE
Whistle Blowing Policy
A Whistle-Blowing Policy is in place to provide an avenue through which employees and any other persons may report in
good faith and in confidence any concerns in financial and other matters, and for independent investigation of such matters
and appropriate follow-up action. All whistle-blower complaints will be reviewed by the ARC Committee to ensure that
investigations and follow-up actions are carried out, if needed.
Principle 13: Internal Audit
The Manager has in place an internal audit function which was supported by the Internal Audit Department (IA) of Fraser
and Neave, Limited (F&N). Notwithstanding the demerger of FCL from the F&N group and the listing of FCL on 9 January
2014, such internal audit services continued to be provided pursuant to a transitional arrangement between F&N and FCL for
shared corporate services. It is intended that the internal audit function will be supported by the Internal Audit Department
of FCL on cessation of the transitional arrangement.
The IA is independent of the activities that it audits. The Head of IA, who is a Chartered Accountant of Singapore, reported
directly to the Chairman of the ARC Committee.
The Head of IA and most of the internal audit staff are members of the Institute of Internal Auditors, Singapore and the
department has adopted and complied with the Standards for the Professional Practice of Internal Auditing set by the Institute
of Internal Auditors. To ensure that the internal audits are effectively performed, it recruits and employs suitably qualified
staff with the requisite skills and experience. Such staff are also given relevant training and development opportunities to
update their technical knowledge and auditing skills. Key staff members of the IA also receive relevant technical training
and attend seminars organised by the Institute of Internal Auditors, Singapore and other professional bodies.
The IA operates within the framework stated in its terms of reference. It adopts a risk-based audit methodology to develop
its audit plans, and its activities are aligned to key risks of FCOT. Based on risk assessments performed, greater focus and
appropriate review intervals are set for higher risk activities, and material internal controls, including compliance with FCOT
and the Manager’s policies, procedures and regulatory responsibilities.
During the year, IA conducted its audit reviews based on the approved internal audit plans. All audit reports detailing audit
findings and recommendations are provided to Management who would respond on the actions to be taken. Each quarter,
IA would submit to the ARC Committee a report on the status of the audit plan and on audit findings and actions taken by
Management on such findings. Key findings are highlighted at the ARC Committee meetings for discussion and follow-up
action. The ARC Committee monitors the timely and proper implementation of required corrective, preventive or improvement
measures undertaken by Management.
The ARC Committee is satisfied that for the financial year ended 30 September 2014, the internal audit function is adequately
resourced to perform its functions, and has appropriate standing within FCOT and the Manager.
UNITHOLDER RIGHTS AND RESPONSIBILITIES
Principle 14: Unitholder Rights
The Manager believes in treating all Unitholders fairly and equitably. It aspires to keep all Unitholders and other stakeholders
and analysts in Singapore and beyond informed of FCOT’s activities, including changes (if any) in FCOT’s business which are
likely to materially affect the price or value of its Units, in a timely and consistent manner.
Unitholders are also given the opportunity to participate effectively and vote at general meetings of FCOT, where relevant
rules and procedures governing such meetings (for instance, how to vote) are clearly communicated.
Principle 15: Communication with Unitholders
The Manager is committed to regular, effective and fair communication with its Unitholders. It has a dedicated investor
relations team which handles communications with investors, the investment community, analysts and the media.
In FY2014, the Manager participated in 28 conferences, conference calls, meetings and non-deal roadshows and met with
more than 100 existing and potential investors and analysts in Bangkok, Hong Kong, Singapore and Tokyo. These are excellent
avenues for the Manager to keep investors updated on the latest performances, developments, strategies and outlook for
FCOT. At the same time, the Manager is also able to understand the matters which are key to investors.
78
annual
report
2014
Briefings for analysts and luncheon for investors are generally held in conjunction with the release of FCOT’s half-year and
full-year financial results. To ensure transparency, announcements including press releases and presentation slides are
released to SGX-ST via SGXNET, and posted on FCOT’s website at www.fraserscommercialtrust.com. Both announcements
through FCOT’s website and the SGXNET are the principal media of communication with Unitholders.
For the second consecutive year, FCOT was conferred the runner-up in the Singapore Corporate Governance Award under
the REITs and Business Trusts category at the 15th SIAS Investors’ Choice Awards 2014.
FCOT is also a signatory to the 2014 Corporate Governance Statement of Support organised by SIAS where FCOT has pledged
its commitment to uphold high standards in corporate governance.
Principle 16: Conduct of Unitholder Meetings
A copy of the FCOT Annual Report is sent to all Unitholders. In compliance with the Code on CIS, an AGM is held after the
close of each financial year allowing the Manager to interact with investors. At the AGM held during the year, Unitholders
were invited to vote on each of the resolutions by poll, using an electronic voting system. This allowed all Unitholders present
or represented at the meeting to vote on a per unit, one vote basis. The voting result was screened at the meeting and
announced to the SGX-ST after the meeting. As and when an EGM is convened, a circular will be sent to each Unitholder.
The circular contains details of the matters proposed for Unitholders’ consideration and approval.
Board members and Management are in attendance at Unitholders’ meetings where Unitholders are given the opportunity
to raise questions and clarify any issues they may have relating to the resolutions to be passed. The external auditors are
also present to address queries about the conduct of audit and the preparation and content of the auditors’ report.
Dealings in Units
The Manager has adopted a Dealing Policy on securities trading which provides guidance with regard to dealings in the FCOT
units by its Directors, officers and employees. Directors, officers and employees are prohibited from dealing in FCOT units:
• in line with the Listing Rule 1207(19)(c) on Dealings in Securities, two weeks before the date of announcement of quarterly
financial statements and one month before the date of announcement of full-year results (Prohibition Period); and
• at any time while in possession of unpublished material or price sensitive information.
Directors, officers and employees are also directed to refrain from dealing in FCOT units on short-term considerations.
Prior to the commencement of the Prohibition Period, Directors, officers and employees will be reminded not to trade during
this period or whenever they are in possession of unpublished price sensitive information. Outside of the Prohibition Period,
any trades must be reported to the Board within 48 hours. Every quarter, each Director, officer or employee is required to
complete and submit a declaration form to the Compliance Officer to report any trades he/she has made in FCOT units in
the previous quarter and confirm that no trades were made during the Prohibition Period. A quarterly report will be provided
to the ARC Committee. Any non-compliance with the Dealing Policy such as trading within the Prohibition Period will be
reported to the ARC Committee for its review and instructions.
In compliance with the Dealing Policy in relation to the Manager, prior Board approval is required before the Manager deals
or trades in any FCOT units. The Manager has undertaken that it will not deal in FCOT units:
a) during the period commencing one month before the public announcement of FCOT’s annual results and (where applicable)
property valuations and two weeks before the public announcement of FCOT’s quarterly results, or
b) whenever it is in possession of unpublished material price sensitive information.
The Manager has also given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its holdings in
FCOT units and any changes thereto within two business days after the date on which it acquires or disposes of any FCOT
units, as the case may be.
79
Frasers
Commercial
Trust
CORPORATE
GOVERNANCE
Conflicts of Interest
Procedures put in place to address potential conflicts of interest (including in relation to Directors, officers and employees)
which may arise in managing FCOT include:
• The Manager is to be dedicated to managing FCOT and will not directly or indirectly manage other Reits, without first
obtaining approval from MAS.
• All executive officers are to be employed by the Manager.
• All resolutions in writing of Directors in relation to matters concerning FCOT must be approved by a majority of the
Directors, including at least one Independent Director.
• At least one-third of the Board shall comprise Independent Directors.
• On matters where FCL, its subsidiaries or shareholders have an interest (directly or indirectly), directors nominated by
them shall abstain from voting. In such matters, the quorum must comprise a majority of Independent Directors and
exclude nominee Directors of FCL and/or its subsidiaries.
• An interested Director is required to disclose his interest in any proposed transaction with FCOT and is required to abstain
from voting on resolutions approving the transaction.
In addition, FCOT has been granted a right of first refusal by FCL over completed income producing properties located in
the Asia Pacific region used for commercial purposes (comprising primarily office and/or business space).
Interested Person Transactions
There is no general mandate obtained for interested person transactions (IPTs and each an IPT). All IPTs are undertaken
on normal commercial terms and the Board, with the assistance of the ARC Committee, ensures that such IPTs are not
prejudicial to the interests of FCOT and the minority Unitholders. This may entail obtaining (where practicable) quotations
from parties unrelated to the Manager, or obtaining one or more valuations from independent professional valuers (in
accordance with the Code on CIS).
All IPTs are entered in a register maintained by the Manager, including any quotations from unrelated parties and independent
valuations forming the bases on which such IPTs are entered into. The Manager incorporates into its internal audit plan a
review of all IPTs recorded in the register. The review includes the examination of the nature of the IPTs and its supporting
documents or such other data deemed necessary by the ARC Committee. The ARC Committee reviews the internal audit
reports to ascertain that internal procedures and the relevant provisions of the Listing Manual and the Code on CIS are
complied with by Management in its dealings on IPTs. British and Malayan Trustees Limited, in its capacity as trustee of
FCOT (the Trustee), has the right to review any such relevant internal audit reports to ascertain that the requirements under
the Code on CIS have been complied with.
Directors interested in a proposed IPT to be entered into by FCOT are required to abstain from any deliberations or decisions
in relation to that IPT.
Any IPT proposed to be entered into between FCOT and an interested person, would require the Trustee to satisfy itself that
such IPT is conducted on normal commercial terms, is not prejudicial to the interests of FCOT and its Unitholders, and is
in accordance with all applicable requirements of the Code on CIS and the Listing Manual.
80
FinanCiaLs
82
REPORT
OF THE TRUSTEE
90
PORTFOLIO
S TAT E M E N T S
83
S TAT E M E N T
BY THE MANAGER
92
C O N S O L I D AT E D C A S H
F LO W S TAT E M E N T
84
INDEPENDENT
AUDITOR’S REPORT
TO THE
UNITHOLDERS
OF FRASERS
COMMERCIAL
TRUST
94
NOTES TO THE
FINANCIAL
S TAT E M E N T S
85
BALANCE SHEETS
86
S TAT E M E N T S
O F TOTA L R E T U R N
87
DISTRIBUTION
S TAT E M E N T S
135
U nitholders ’
S tatistics
138
I nterested P erson
transactions
139
NOTICE OF
ANNUAL GENERAL
MEETING
P ro x y F orm
89
S TAT E M E N T S O F
MOVEMENTS
IN UNITHOLDERS’
FUNDS
Frasers
Commercial
Trust
R E P O R T
O F
T H E
T R U S T E E
British and Malayan Trustees Limited (the “Trustee”) is under a duty to take into custody and hold the assets of Frasers
Commercial Trust (the “Trust”) and its subsidiaries (collectively, the “Group”) in trust for the holders of the Ordinary Units
(“Unitholders”) in the Trust (the “Units”). In accordance with, among other things, the Securities and Futures Act (Cap. 289),
its subsidiary legislation, the Code on Collective Investment Schemes and the Listing Manual (collectively referred to as the
“laws and regulations”), the Trustee shall monitor the activities of Frasers Centrepoint Asset Management (Commercial)
Ltd. (the “Manager”) for compliance with the limitations imposed on the investment and borrowing powers as set out
in the trust deed dated 12 September 2005 (as amended by the amending and restating deeds on 23 February 2006, 20
March 2006 and 27 July 2010, and supplemental deeds of amendments dated 30 April 2007, 31 March 2009, 29 July 2009,
26 August 2009, 25 November 2009, 28 January 2010, 20 January 2011 and 22 August 2012) between the Trustee and
the Manager (the “Trust Deed”) in each annual accounting period and report thereon to Unitholders in an annual report
which shall contain the matters prescribed by the laws and regulations as well as the recommendations of Statement of
Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered
Accountants and the provisions of the Trust Deed.
To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Group during the financial
year covered by these financial statements, set out on pages 85 to 134, comprising the Balance Sheets and Portfolio
Statements of the Group and Trust as at 30 September 2014, the Statements of Total Return, Distribution Statements and
Statements of Movements in Unitholders’ Funds of the Group and the Trust, and the Consolidated Cash Flow Statement
of the Group for the financial year then ended, and a summary of the significant accounting policies and other explanatory
notes, in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed, laws
and regulations and otherwise in accordance with the provisions of the Trust Deed.
For and on behalf of the Trustee,
British and Malayan Trustees Limited
James William Cox
Chief Executive Officer and Director
Nigel David Stead
Director
Singapore
11 November 2014
82
annual
report
2014
S TAT E M E N T
B Y
T H E
M ANA G E R
In the opinion of the directors of Frasers Centrepoint Asset Management (Commercial) Ltd., the accompanying financial
statements, set out on pages 85 to 134, comprising the Balance Sheets and Portfolio Statements of Frasers Commercial
Trust (the “Trust”) and its subsidiaries (collectively, the “Group”) as at 30 September 2014, the Statements of Total
Return, Distribution Statements and Statements of Movements in Unitholders’ Funds of the Group and the Trust, and
the Consolidated Cash Flow Statement of the Group for the financial year then ended, and a summary of the significant
accounting policies and other explanatory notes are drawn up so as to present fairly, in all material respects, the financial
positions of the Group and of the Trust as at 30 September 2014, the total return, movements in Unitholders’ funds of
the Group and of the Trust and cash flows of the Group for the financial year ended on that date in accordance with the
recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by
the Institute of Singapore Chartered Accountants and the provisions of the Trust Deed.
At the date of this statement, there are reasonable grounds to believe that the Group and the Trust will be able to meet their
financial obligations as and when they materialise.
For and on behalf of the Manager,
Frasers Centrepoint Asset Management (Commercial) Ltd.
Dr Chua Yong Hai
Chairman and Director
Low Chee Wah
Chief Executive Officer and Director
Singapore
11 November 2014
83
Frasers
Commercial
Trust
IN D E P E N D E N T A U D I T O R ’ S R E P O R T
T O T H E U NI T H O L D E R S O F F R AS E R S C O M M E R C IA L T R U S T
( constituted in the R epublic of S ingapore pursuant to a T rust D eed dated
1 2 S eptember 2 0 0 5 )
R eport o n the F i n a n c i a l Statemen t s
We have audited the accompanying financial statements of Frasers Commercial Trust (the “Trust”) and its subsidiaries
(collectively, the “Group”) as set out on pages 85 to 134, which comprise the Balance Sheets and Portfolio Statements of the
Group and of the Trust as at 30 September 2014, the Statements of Total Return, Distribution Statements and Statements
of Movements in Unitholders’ Funds of the Group and the Trust, and the Consolidated Cash Flow Statement of the Group
for the financial year then ended, and a summary of significant accounting policies and other explanatory information.
Manager ’ s R e s pon s i b i l i ty for the F inancial Stateme nts
The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance
with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts”
issued by the Institute of Singapore Chartered Accountants, and for such internal control as the Manager determines is
necessary to enable the preparation of financial statements that are free from material misstatements, whether due to
fraud or error. This responsibility includes: designing, implementing and maintaining internal controls relevant to the
preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud
or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in
the circumstances.
Auditor ’ s R e s pon s i b i l i ty
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal controls relevant to the Trust’s preparation and fair presentation of financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Trust’s internal controls. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by the Manager, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Op inio n
In our opinion, the consolidated financial statements of the Group, and the balance sheet, portfolio statement, distribution
statement, statement of movements in Unitholders’ funds and statement of total return of the Trust present fairly, in
all material respects, the financial position of the Group and of the Trust as at 30 September 2014, and the total return,
distributable income and movements in Unitholders’ funds of the Group and the Trust and cash flows of the Group for the
financial year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7
“Reporting Framework for Unit Trusts” issued by the Institute of Singapore Chartered Accountants.
ERNST & YOUNG LLP
Public Accountants and
Chartered Accountants
Singapore
11 November 2014
84
annual
report
2014
B A L AN C E
S H E E T S
A S AT 3 0 S E P T E M B E R 2 0 1 4
Group
2013
S$’000
2014
S$’000
2013
S$’000
3
4
5
6
1,824,870
–
–
71
1,824,941
1,811,417
–
–
69
1,811,486
1,216,200
165,745
98,990
71
1,481,006
1,171,000
130,745
102,148
69
1,403,962
7
2,991
5,893
631
47,372
56,887
1,881,828
2,557
5,335
627
42,539
51,058
1,862,544
114,485
402
631
41,929
157,447
1,638,453
111,363
289
627
37,858
150,137
1,554,099
692,105
9,921
62,277
764,303
572,076
5,697
67,686
645,459
539,948
9,921
–
549,869
413,878
5,697
–
419,575
8
10
12
1,167
–
21,702
2,668
592
26,129
790,432
1,091,396
3,490
127,383
21,555
1,503
1,761
155,692
801,151
1,061,393
479
–
46,957
2,668
–
50,104
599,973
1,038,480
753
127,383
47,899
1,503
–
177,538
597,113
956,986
13
1,091,315
1,049,236
1,038,399
944,829
14
81
1,091,396
12,157
1,061,393
81
1,038,480
12,157
956,986
13
676,685
1.61
657,539
1.60
676,685
1.53
657,539
1.44
Note
Non-current assets
Investment properties
Subsidiaries
Loan to a subsidiary
Fixed assets
Total non-current assets
Current assets
Trade and other receivables
Prepayments
Derivative financial instruments
Cash and bank balances
Total current assets
Total assets
Less:
Non-current liabilities
Interest-bearing borrowings
Security deposits
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Security deposits
Provision for taxation
Total current liabilities
Total liabilities
Net assets
Represented by:
Unitholders’ funds
Series A Convertible Perpetual
Preferred Unitholders’ funds
Units issued at end of financial year (‘000)
Unitholders’ funds per Unit (S$)
Trust
2014
S$’000
8
9
10
11
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
85
Frasers
Commercial
Trust
S TAT E M E N T S
O F
TOTA L
R E T U R N
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2014
Group
Note
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
Gross revenue
Property operating expenses
Net property income
15
16
118,838
(28,284)
90,554
118,197
(27,261)
90,936
81,836
(13,898)
67,938
77,590
(12,576)
65,014
Interest income
Trust expenses
Reversal/(provision) of impairment losses on
investments in subsidiaries
Provision of impairment losses on receivables
Finance expenses
Net income
17
18
238
(13,847)
709
(14,252)
7,863
(13,544)
8,690
(13,674)
4(a)
7(b)
19
–
–
(20,762)
56,183
–
–
(21,728)
55,665
35,000
(137)
(11,579)
85,541
(521)
(347)
(10,796)
48,366
(622)
27,420
(1,273)
95,232
(6,265)
45,173
(17,520)
80,723
2,274
–
–
117
85,372
1,853
87,225
2,046
18,155
–
291
170,116
(8,348)
161,768
278
–
1,312
117
126,156
–
126,156
726
–
477
644
113,416
10
113,426
Exchange differences
Net change in fair value of investment properties
Net change in fair value of derivative financial
instruments
Gain on divestment
Other income
Realised gain on derivative financial instruments
Total return before income tax
Taxation
Total return for the financial year
3
4(c)
20
Earnings per Unit (cents)
Basic
21
12.99
23.62
Diluted
21
12.99
23.62
86
annual
report
2014
D IS T R I B U T I O N
S TAT E M E N T S
Group
Income available for distribution at
beginning of the financial year
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
13,686
22,270
13,686
22,270
Net effect of non-tax deductible/(taxable)
items and other adjustments (Note A)
Distributable income for the financial year (Note B)
Income available for distribution
87,225
161,768
126,156
113,426
(29,944)
57,281
70,967
(102,966)
58,802
81,072
(68,875)
57,281
70,967
(54,624)
58,802
81,072
Distributions declared during the financial year to:
Series A Convertible Perpetual Preferred Unit
(“Series A CPPU”) holders (Note C)
Unitholders (Note D)
Income available for distribution at end of the financial year
(21)
(55,960)
14,986
(7,424)
(59,962)
13,686
(21)
(55,960)
14,986
(7,424)
(59,962)
13,686
Number of Units entitled to distribution (‘000)
Distribution per Unit (cents) (Note 31(b))
676,685
2.21
659,079
2.08
676,685
2.21
659,079
2.08
Note A - Net effect of non-tax deductible/(taxable) items and other adjustments
Group
Amortisation and expensing of borrowing costs
Deferred tax (credit)/expense
Effects of recognising accounting income on
a straight-line basis over the lease term
(Reversal)/provision of impairment losses
on investments in subsidiaries
Provision of impairment losses on receivables
Management fees paid/payable in Units
Net change in fair value of derivative financial instruments
Gain on divestment
Realised loss on derivative financial instruments
Trustee fees
Unrealised exchange loss
Other adjustments
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
1,894
(3,370)
1,955
6,616
1,358
–
901
–
(2,577)
(5,024)
(29)
(1,761)
–
–
2,799
(27,420)
(2,274)
–
60
554
868
(478)
(29,944)
–
–
7,894
(95,232)
(2,046)
(18,155)
354
565
1,181
(1,074)
(102,966)
(35,000)
137
2,799
(45,173)
(278)
–
60
554
6,528
169
(68,875)
521
347
7,894
(80,723)
(726)
–
–
565
17,455
903
(54,624)
87
Frasers
Commercial
Trust
D IS T R I B U T I O N
S TAT E M E N T S
Note B – Distributable income for the financial year
Group and Trust
2014
2013
S$’000
S$’000
Attributable to:
Series A CPPU holders
Unitholders
– from operations
– from capital returns
21
7,424
56,760
500
57,260
57,281
49,788
1,590
51,378
58,802
Note C – Distribution declared to Series A CPPU holders during the financial year
Group and Trust
2014
Distribution
rate
cents
– 1 October 2012 to 31 December 2012
– 1 January 2013 to 31 March 2013
– 1 April 2013 to 30 June 2013
– 1 July 2013 to 30 September 2013
– 1 April 2014 to 30 June 2014
2013
Distribution
Amount
rate
S$’000
cents
–
–
–
–
1.3863
1.3562
1.3712
1.3863
–
–
–
–
15
3
2
1
21
Amount
S$’000
1.3863
1.3562
1.3712
1.3863
–
–
–
–
4,734
2,325
196
169
–
–
–
–
7,424
Note D – Distribution declared to Unitholders during the financial year
Group and Trust
2014
Distribution
rate
cents
– 1 April 2012 to 30 September 2012
– 1 April 2013 to 30 June 2013
– 1 April 2014 to 30 June 2014
–
–
–
–
2.0766
2.0483
2.0524
2.1911
2013
Distribution
Amount
rate
S$’000
cents
–
–
–
–
13,686
13,703
13,789
14,782
55,960
3.4480
1.5832
1.9883
2.1851
–
–
–
–
88
Amount
S$’000
22,270
10,269
13,055
14,368
–
–
–
–
59,962
annual
report
2014
S TAT E M E N T S O F M O V E M E N T S
U NI T H O L D E R S ’ F U N D S
IN
Group
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
1,049,236
989,744
944,829
881,804
Operations
Changes in net assets attributable to Unitholders’ funds
resulting from operations
87,225
161,768
126,156
113,426
Foreign currency translation reserve
Realisation of cumulative translation differences on disposal
of subsidiaries (Note 4(c))
Movement for the financial year
Net movement for the financial year
–
(12,560)
(12,560)
(13,352)
(38,523)
(51,875)
–
–
–
–
–
–
4,729
6,911
(223)
11,978
23,395
8,507
–
–
8,478
16,985
4,729
6,911
(223)
11,978
23,395
8,507
–
–
8,478
16,985
(21)
(55,960)
(7,424)
(59,962)
(21)
(55,960)
(7,424)
(59,962)
(32,586)
(50,401)
(32,586)
(50,401)
1,091,315
1,049,236
1,038,399
944,829
Balance at beginning of the financial year
Unitholders’ transactions
Issue of Units as payment of management fees
Issue of Units pursuant to Distribution Reinvestment Plan
Issue expenses
Conversion of Series A CPPUs to Units
Distributions to Series A CPPU holders
Distributions to Unitholders
Change in Unitholders’ funds resulting from
Unitholders’ transactions
Balance at end of the financial year
89
90
232,452
The Group has a 50% effective interest in Central Park.
(1)
(750,024)
1,091,396 1,061,393
233,229
407,965
Net assets
Commercial
375,441
(733,474)
87
Commercial
133,000
465,000
573,000
Other assets and liabilities (net)
Leasehold
NA
134,200
503,000
579,000
Carrying amount
as at
2014
2013
S$’000
S$’000
1,824,870 1,811,417
18/6/2007
and
13/4/2012
5-storey office complex
Freehold
Commercial
Business
space
Commercial
Existing
use
Portfolio of investment properties, at valuation
Block 4 Section 13,
Tuggeranong, ACT 2900
Australia (“Caroline
Chisholm Centre”)
30/3/2006
47-storey office tower
810
93
81
Remaining
term of
lease
(years)
100.0
(67.3)
167.3
21.4
34.4
12.3
46.1
53.1
100.0
(70.6)
170.6
21.9
38.4
12.5
43.8
54.0
Percentage of
net assets as at
2014
2013
%
%
P O R T F O L I O
Australia
Central Park 152-158 St
Georges Terrace, Perth,
Western Australia, 6000
(“Central Park”)(1)
55 Market Street, Singapore 16-storey office and retail
048941 (“55 Market
building
Street”)
22/11/2006 Leasehold
Leasehold
High-tech business space
development comprising an
8-storey and a 9-storey airconditioned buildings with
basement carpark
26/8/2009
438A & 438B Alexandra
Road, Singapore 119967/8
(“Alexandra Technopark”)
Leasehold
15-storey office and retail tower 30/3/2006
with basement carpark and
heritage shophouses
Singapore
18, 20 & 22 Cross Street,
China Square Central,
Singapore 048423/2/1
(“China Square Central”)
Term of
lease
Description of property
Acquisition
date
Location
By Geography
Group
Frasers
Commercial
Trust
S TAT E M E N T S
A S AT 3 0 S E P T E M B E R 2 0 1 4
956,986
(214,014)
1,038,480
133,000
Net assets
134,200
465,000
573,000
(177,720)
Commercial
503,000
579,000
Carrying amount
as at
2014
2013
S$’000
S$’000
Other assets and liabilities (net)
810
Business
space
Commercial
Existing
use
1,216,200 1,171,000
22/11/2006 Leasehold
93
81
Remaining
term of
lease
(years)
100.0
(17.1)
117.1
12.9
48.4
55.8
100.0
(22.4)
122.4
13.9
48.6
59.9
Percentage of
net assets as at
2014
2013
%
%
P O R T FO L I O
Portfolio of investment properties, at valuation
16-storey office and retail
building
55 Market Street
Leasehold
High-tech business space
development comprising an
8-storey and a 9-storey airconditioned buildings with
basement carpark
26/8/2009
Term of
lease
Leasehold
Acquisition
date
15-storey office and retail tower 30/3/2006
with basement carpark and
heritage shophouses
Description of property
Singapore
Location
By Geography
Trust
annual
report
2014
S TAT E M E N T S
A S AT 3 0 S E P T E M B E R 2 0 1 4
91
Frasers
Commercial
Trust
C O NS O L I D A T E D
C AS H
F LO W
S TAT E M E N T
Group
Cash flow from operating activities
Adjustments for:
Amortisation of leasing fees capitalised
Depreciation of fixed assets
Effects of recognising accounting income on a straight-line basis over the lease term
Finance expenses
Interest income
Management fees paid/payable in Units (Note A)
Net change in fair value of derivative financial instruments
Realised gain on derivative financial instruments
Gain on divestment
Operating cash flow before working capital changes
Changes in working capital:
Cash generated from operations
Income tax paid
Net cash generated from operating activities
Cash flow from investing activities
Capital expenditure on investment properties
Net cash outflow from disposal of subsidiaries (Note 4(c))
Payment for leasing costs capitalised during the year
Purchase of fixed assets
Interest received
Net cash used in investing activities
Cash flow from financing activities
Decrease in restricted cash
Distributions paid (Note A)
Interest expenses paid
Issue expenses paid
Payment for derivative financial instruments
Proceeds from borrowings
Repayment of borrowings
Redemption of Series A CPPUs
Realisation of derivative financial instruments
Payment of transaction costs on borrowings
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
Effects of changes in exchange rates on opening cash and cash equivalents
Cash and cash equivalents at end of the financial year (Note 9)
2014
S$’000
2013
S$’000
85,372
170,116
611
20
(2,577)
20,762
(238)
2,799
(27,420)
(2,274)
(117)
–
76,938
450
17
(5,024)
21,728
(709)
7,894
(95,232)
(2,046)
(291)
(18,155)
78,748
(998)
8,722
84,662
(2,652)
82,010
2,091
(28,382)
52,457
(157)
52,300
(3,167)
–
(509)
(22)
244
(3,454)
(16,985)
(13,096)
(1,162)
(22)
701
(30,564)
–
(49,238)
(20,063)
(213)
–
698,590
(696,317)
(98)
117
(6,356)
(73,578)
(1,661)
(76,636)
(19,985)
–
(83)
127,500
(158,767)
(321,865)
291
(233)
(451,439)
4,978
42,539
(145)
47,372
(429,703)
473,902
(1,660)
42,539
92
annual
report
2014
C O NS O L I D A T E D
C AS H
F LO W
S TAT E M E N T
Note A – Significant non-cash transactions
(i)
Management fees paid/payable in Units
During the financial year, 2,165,156 (2013: 6,025,835) Units were issued and issuable in satisfaction of management
fees payable in Units during the financial year, amounting to a value of S$2,799,000 (2013: S$7,894,000).
(ii)
Distributions paid
The amount of S$49,238,000 represent the cash component of the distributions paid and exclude an aggregate
amount of S$6,911,000 paid by way of issuance of 5,327,990 Units, pursuant to the Distribution Reinvestment Plan
implemented during the financial year.
93
Frasers
Commercial
Trust
N O T E S
TO
T H E
F I N A N C I A L
S TAT E M E N T S
3 0 SE P T EM B ER 2 0 1 4
The following Notes form an integral part of the Financial Statements:
1.
G e n er al
Frasers Commercial Trust (the “Trust”) is a Singapore-domiciled unit trust constituted pursuant to a trust deed
dated 12 September 2005 between Frasers Centrepoint Asset Management (Commercial) Ltd. (the “Manager”)
and British and Malayan Trustees Limited (the “Trustee”), subsequently amended by amending and restating
deeds dated 23 February 2006, 20 March 2006 and 27 July 2010, and further amended by supplemental deed of
amendments dated 30 April 2007, 31 March 2009, 29 July 2009, 26 August 2009, 25 November 2009, 28 January
2010, 20 January 2011 and 22 August 2012 (collectively, the “Trust Deed”). The Trust Deed is governed by the laws
of the Republic of Singapore. The Trustee is under a duty to take into custody and hold the assets of the Trust and
its subsidiaries (the “Group”) in trust for the holders of Units in the Trust (“Unitholders”).
The Trust was formally admitted to the official list of the Singapore Exchange Securities Trading Limited on
30 March 2006 and was included under the Central Provident Fund Investment Scheme on 30 March 2006.
The principal activities of the Group and the Trust are those relating to investment in a portfolio of commercial real
estate and real estate related assets with the primary objective of delivering regular and stable distributions to
Unitholders, and to achieve long-term growth in such distributions and the Unitholders’ funds per Unit.
The financial statements were authorised for issue by the Manager and the Trustee on 11 November 2014.
The Group has entered into several service agreements in relation to the management of the Group and its property
operations. The fee structures in respect of the services are as follows:
(a)
Trustee fees
The Trustee is entitled to receive a fee at the rate of 0.03% per annum of the gross asset value of the Group,
subject to a minimum of $36,000 per annum, excluding out-of-pocket expenses and Goods and Services Tax
(“GST”). The fee is paid quarterly in arrears in accordance with the Trust Deed.
(b)
Management and property management fees
(i)
Management fees
Pursuant to the Trust Deed, the Manager is entitled to management fees comprising a base fee and
performance fee as follows:
–
Base fees
The Manager is entitled to receive a base fee of 0.5% per annum of the value of the real estate
assets of the Group; and
–
Performance fees
The Manager is entitled to receive a performance fee calculated at the rate of 3.5% per annum
of the performance fee amount (being the net real estate asset income less the base fee).
94
annual
report
2014
N O T E S
TO
T H E
F I N A N C I A L
S TAT E M E N T S
3 0 S EPTE M B ER 2 0 1 4
1.
G e n er al ( con t ’ d )
(b)
Management and property management fees (cont’d)
(ii)Acquisition and divestment fees
The Manager is entitled to receive an acquisition fee of not more than 1.0% of the acquisition price of
acquisition of properties and a divestment fee of not more than 0.5% of the sale price on disposals
of properties.
(iii)
Property management fees
The property manager (the “Property Manager”) is entitled to receive a property management fee
equal to 3.0% per annum of all revenue of the real estate assets excluding GST.
The Manager and Property Manager may, at their election, in the years subsequent to 2009, be paid base
fees, performance fees, property management fees, and acquisition and divestment fees in cash, in Units or
a combination of both. The Manager and Property Manager are entitled to all the rights attached to any Units
issued to them as payment for the base fees, performance fees, property management fees or acquisition
and divestment fees. The fees, whether payable in any combination of cash and Units or solely in cash or
Units, will be payable quarterly in arrears. The price of Units issued is determined based on the volume
weighted average price of Units for the ten business days preceding the end of the respective quarters.
During the financial year, the Manager opted to receive 23.6% (2013: 67.5%) of the base fees and performance
fees in the form of Units in the Trust. The remaining 76.4% (2013: 32.5%) was paid/payable in cash. There
were neither any acquisition fees nor divestment fees paid to the Manager during the financial year.
During the financial year, the Property Manager has received 100.0% (2013: 100.0%) of the property
management fees in cash.
2.Summ ary of s i g n i f i ca n t accou nting policies
2.1
Basis of preparation
The financial statements have been prepared in accordance with the recommendations of the Statement of
Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” (“RAP 7”) issued by the Institute of
Singapore Chartered Accountants (formerly known as the Institute of Certified Public Accountants of Singapore) and the
applicable requirements of the Code on Collective Investment Schemes (“CIS Code”) issued by the Monetary Authority
of Singapore (“MAS”) and the provisions of the Trust Deed. RAP 7 requires the accounting policies to generally comply
with the recognition and measurement principles of Singapore Financial Reporting Standards (“FRS”).
The financial statements have been prepared on the historical cost basis, except as disclosed in the accounting
policies below.
The financial statements are presented in Singapore dollars, which is the functional currency of the Trust. All
financial information has been rounded to the nearest thousand, unless otherwise stated.
95
Frasers
Commercial
Trust
N O T E S
TO
T H E
F I N A N C I A L
S TAT E M E N T S
3 0 SE P T EM B ER 2 0 1 4
2.Summ ary of s i g n i f i ca n t accoun ting policies (cont’ d)
2.1
Basis of preparation (cont’d)
(a)Significant accounting judgements and estimates
The preparation of financial information in conformity with RAP 7 requires the Manager to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in
applying accounting policies that have the most significant effect on the amount recognised in the financial
statements are described in the following notes:
(i)
(ii)
2.2
Note 3 – Valuation of investment properties
Note 8 – Valuation of derivative financial instruments
Changes in accounting policies
The accounting policies have been consistently applied by the Group and Trust and are consistent with those used
in the previous financial year, except as disclosed in the accounting policies below.
(a)Adoption of New and Revised Standards
In the current year, the Group and Trust have adopted all the new and revised FRS and Interpretations of
FRS (“INT FRS”) that are relevant and effective for annual periods beginning on or after 1 October 2013, as
follows:
Improvements to FRSs 2012:
–
Amendments to FRS 1
–
Amendments to FRS 32
FRS 113
Amendments to FRS 107 Disclosures
Presentation of Financial Statements
Financial Instruments: Presentation
Fair Value Measurement
Offsetting Financial Assets and Financial Liabilities
The adoption of the above standards did not result in any substantial change to the accounting policies nor
any significant impact on the financial statements of the Group or the Trust, except for the following:
(i)
FRS 113 Fair Value Measurement
FRS 113 provides a single source of guidance for all fair value measurements. FRS 113 does not
change when an entity is required to use fair value, but rather provides guidance on how to measure
fair value under FRS when fair value is required or permitted by FRS. From 1 October 2013, in
accordance with the transitional provisions of FRS 113, the Group has applied the new fair value
measurement guidance prospectively. The change had no significant impact on the measurements
of the Group’s assets and liabilities. The additional disclosures as a result of the adoption of this
standard have been included in Note 26.
96
annual
report
2014
N O T E S
TO
T H E
F I N A N C I A L
S TAT E M E N T S
3 0 S EPTE M B ER 2 0 1 4
2.3
Basis of consolidation
(a)Subsidiaries
Subsidiaries are entities (including special purpose entities) controlled by the Group. The financial statements
of subsidiaries are included in the consolidated financial statements of the Group from the date that control
commences until the date that control ceases.
The financial statements of subsidiaries are prepared using consistent accounting policies. Adjustments are
made to any dissimilar material accounting policies to align them with the significant accounting policies
adopted by the Group.
(b)
Loss of control
When a change in the ownership interest in a subsidiary results in a loss of control over the subsidiary,
the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts recognised in
equity in respect of that entity are also reclassified to the statement of total return or transferred directly to
revenue reserves if required by a specific FRS.
Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount
of the retained investment at the date when control is lost and its fair value is recognised in the statement
of total return.
(c)
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
2.4Investment in subsidiaries
Investment in subsidiaries are stated in the Trust’s balance sheet at cost less accumulated impairment losses.
2.5
Foreign currencies
(a)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities
at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated at the exchange rate at the reporting date.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Non-monetary items in a foreign currency that are measured in terms of historical cost are translated
using the exchange rate as at the dates of the transaction. Foreign currency differences arising from the
retranslation are recognised in the statement of total return, except for retranslation of monetary items that
in substance form part of the Group’s net investment in a foreign operation (Note 2.5(c)).
97
Frasers
Commercial
Trust
N O T E S
TO
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F I N A N C I A L
S TAT E M E N T S
3 0 SE P T EM B ER 2 0 1 4
2.5
Foreign currencies (cont’d)
(b)
Foreign operations
The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates at the
end of the reporting period. The income and expenses of foreign operations are translated to Singapore
dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments, if any, arising
on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and
translated at the closing rate.
Foreign currency differences are recognised in Unitholders’ funds. When a foreign operation is disposed of
such that control or joint control is lost, the cumulative amount of foreign currency differences relating to
that foreign operation is reclassified to statement of total return as part of the gain or loss on disposal. When
the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining
control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When
the Group disposes of only part of its investment in a joint venture that includes a foreign operation while
retaining joint control, the relevant proportion of the cumulative amount is reclassified to the statement of
total return.
(c)Net investment in a foreign operation
Exchange differences arising from monetary items that in substance form part of the Trust’s net investment
in a foreign operation are recognised in the Trust’s statement of total return. Such exchange differences
are reclassified to Unitholders’ funds in the consolidated financial statements. When the net investment is
disposed of, the cumulative amount in Unitholders’ funds is transferred to the statement of total return as
an adjustment to total return arising on disposal.
2.6Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or both, but not
for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative
purposes. Investment properties are measured at cost on initial recognition and subsequently at fair value with any
change therein recognised in the statement of total return.
Cost includes expenditure that is directly attributable to the acquisition of the investment properties. Fair value is
determined at each balance sheet date in accordance with the Trust Deed. In addition, the investment properties are
valued by independent professional valuers at least once a year, in accordance with the CIS Code issued by the MAS.
Subsequent expenditure relating to investment properties that has already been recognised is added to the carrying
amount of the asset when it is probable that future economic benefits, in excess of originally assessed standard
of performance of the existing asset, will flow to the Group. All other subsequent expenditure is recognised as an
expense in the period in which it is incurred.
When an investment property is disposed of, the resulting gain or loss recognised in the statement of total return is
the difference between the net disposal proceeds and the carrying amount of the property.
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2.7
Fixed assets
Fixed assets are measured at cost less accumulated depreciation and accumulated impairment losses. The cost
includes directly attributable costs of bringing the asset to a working condition for its intended use. Expenditure for
additions, improvements and renewals are capitalised and expenditure for repair and maintenance are charged to
the statement of total return.
The gain or loss on disposal of an item of fixed asset is determined by comparing the proceeds from disposal with
the carrying amount of the fixed asset, and is recognised in the statement of total return.
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed and if a component has a useful life that is different from the remainder of that asset, that component is
depreciated separately.
Depreciation is recognised in the statement of total return on a straight-line basis over the estimated useful lives of
the fixed assets. The principal annual rates of depreciation are as follows:
–
–
–
Furniture and fittings
Equipment
Computers
20%
20%
20%
The depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and
adjusted if appropriate.
2.8
Financial instruments
(a)Non-derivative financial assets
The Group initially recognises loans and receivables on the date they originate. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the trade date,
which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset
expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction
in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any
interest in transferred financial assets that is created or retained by the Group is recognised as a separate
asset or liability.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an
active market. Such assets are recognised initially at fair value plus any directly attributable transaction
costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective interest method, less any impairment losses.
(b)Non-derivative financial liabilities
All financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a
party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such
financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the
effective interest method.
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2.8
Financial instruments (cont’d)
(c)
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures.
Derivative financial instruments are recognised initially at fair value and attributable transaction costs
are recognised in the statement of total return as incurred. Subsequent to initial recognition, derivative
financial instruments are measured at fair value and changes to fair value are recognised in the statement
of total return.
(d)
Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and
only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
2.9
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and bank deposits with original maturities of twelve months
or less.
2.10Impairment
(a)Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than investment properties, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount
of an asset or its related cash generating unit exceeds its estimated recoverable amount.
The recoverable amount of an asset or cash generating unit is the greater of its fair value less costs of
disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset or cash generating unit. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generate cash inflows from continuing use that are largely independent of the cash inflows of other assets
or cash generating unit.
Impairment losses are recognised in the statement of total return. Impairment losses recognised in prior
periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
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2.10Impairment (cont’d)
(b)Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine
whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence
indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has
a negative effect on the estimated future cash flows of that asset that can be measured reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor,
indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers
or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active
market for a security.
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific asset and
collective level. All individually significant loans and receivables are assessed for specific impairment. All
individually significant receivables found not to be specifically impaired are then collectively assessed for
any impairment that has been incurred but not yet identified. Loans and receivables that are not individually
significant are collectively assessed for impairment by grouping together loans and receivables with similar
risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, the timing
of recoveries and the amount of loss incurred, adjusted for the Manager’s judgement as to whether current
economic and credit conditions are such that the actual losses are likely to be greater or less than suggested
by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows, discounted at the
asset’s original effective interest rate. Losses are recognised in the statement of total return and reflected
in an allowance account against loans and receivables. Interest on the impaired asset continues to be
recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to
decrease, the decrease in impairment loss is reversed through the statement of total return.
2.11 Unitholders’ funds
Unitholders’ funds represent the residual interest in the Group’s net assets upon termination and are classified as equity.
Expenses incurred in the issuance and placement of units in the Group are deducted directly against Unitholders’ funds.
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2.12 Revenue recognition
(a)
Rental income from operating leases
Rental income from investment properties is recognised in the statement of total return on a straight-line
basis over the term of the lease. Lease incentives granted are recognised on a straight-line basis over the
term of the lease.
(b)Interest income
Interest income is recognised as it accrues in the statement of total return, using the effective interest method.
(c)
Dividend and distribution income
Dividend and distribution income is recognised in the statement of total return on the date when the right to
receive payment is established.
(d)
Other property income
Other property income comprises mainly outgoing recoverables and is recognised when the services
are rendered.
2.13 Finance costs
Finance costs comprise interest expenses on borrowings and expenses incurred in connection with the arrangement
of debt facilities.
Interest expenses on borrowings are recognised in the statement of total return using the effective interest method.
Expenses incurred in connection with the arrangement of debt facilities are recognised in the statement of total
return on an effective interest basis over the period for which the debt facilities are granted.
2.14Income taxes
Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in the statement
of total return except to the extent that it relates to items recognised directly in Unitholders’ funds.
Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustments to tax payables in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
•temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit; and
•temporary differences related to investments in subsidiaries and joint ventures to the extent that it is
probable that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
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2.14Income taxes (cont’d)
Deferred tax on temporary differences arising from investment properties measured at fair value is measured at
the tax rates that are expected to be applied, based on a rebuttable presumption that the carrying amount of the
investment properties will be recovered entirely through sale.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
A deferred tax asset is recognised for deductible temporary differences, to the extent that it is probable that future
taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
The Trust has obtained Tax Rulings currently applicable in relation to its Singapore and Australia as follows:
(1)Tax Ruling 1 was obtained from the Inland Revenue Authority of Singapore (“IRAS”) and was dated 13 October
2005. It confirms the Singapore tax consequences for the Trust and Unitholders in relation to the income
arising from the Trust’s properties.
(2)Tax Ruling 2 was obtained from the Ministry of Finance (“MOF”) via letters dated 9 December 2005 and
2 February 2006. It confirms the Singapore tax consequences for Frasers Commercial Investments No. 1 Pte.
Ltd. (“Frasers Investment 1”) in relation to the income arising from Central Park.
(3)Tax Ruling 3 was obtained from IRAS and was dated 16 February 2007, and was further updated on 3 April
2007, 7 January 2011 and 16 February 2012. It confirms the Singapore tax consequences of certain foreign
income derived from Caroline Chisholm Centre in Australia.
(4)Tax Ruling 4 was obtained from IRAS and was dated 18 June 2009. It confirms the Singapore tax consequences
of the Trust and Series A CPPU holders in relation to the income arising from Alexandra Technopark.
Subject to full compliance with the terms and conditions of the above Tax Rulings, the taxation of the Trust and that
of the Unitholders and Series A CPPU holders is described below.
(a)
Tax Ruling 1
Tax Ruling 1 grants tax transparency treatment on the Trust’s taxable income from properties (“Taxable
Income”) that is distributed to the Unitholders. Subject to meeting the terms and conditions of Tax Ruling
1, the Trust will not be assessed tax on the Taxable Income. Instead, the Trust will deduct income tax at the
prevailing corporate tax rate, currently at 17.0% (2013: 17.0%), from the distributions made to Unitholders
that are made out of the Taxable Income of the Trust, except:
(i)where the beneficial owners are individuals or qualifying Unitholders, the Trust will make the
distributions to such Unitholders without deducting any income tax; and
(ii)where the beneficial owners are foreign non-individual investors or where the Units are held by
nominee Unitholders who can demonstrate that the Units are held for beneficial owners who are
foreign non-individual investors, the Trust will deduct/withhold tax at the reduced rate of 10.0% from
the distribution made during the period from 18 February 2005 to 31 March 2015.
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(a)
Tax Ruling 1 (cont’d)
A qualifying Unitholder is an Unitholder who is:
(i)
a Singapore-incorporated company which is a tax resident in Singapore;
(ii)a body of persons, other than a company or a partnership or persons acting in the capacity of a trustee,
registered or constituted in Singapore (for example, a town council, a statutory board, a registered
charity, a registered co-operative society, a registered trade union, a management corporation, a
club and a trade and industry association); or
(iii)a Singapore branch of a foreign company which has presented a letter of approval from the IRAS
granting a waiver from tax deduction at source in respect of distributions from the Trust.
A foreign non-individual Unitholder is one who is not a resident of Singapore for income tax purposes and:
(i)
who does not have a permanent establishment in Singapore; or
(ii)who carries on any operation in Singapore through a permanent establishment in Singapore where
the funds used to acquire the Units are not obtained from that operation in Singapore.
Under Tax Ruling 1, the Trust will distribute at least 90.0% of its Taxable Income, comprising substantially
income from the letting of real estate properties in Singapore and incidental property related service income
and income from management or holding of real estate properties. For the remaining amount of Taxable
Income of the Trust not distributed, tax will be assessed on and collected from the Trust on such remaining
amount (referred to as “Retained Taxable Income”).
In the event where a distribution is subsequently made out of such Retained Taxable Income, the Trust will
not have to make a further deduction of income tax from the distribution.
In the event that there are subsequent adjustments to the Taxable Income when the actual Taxable Income of
the Trust is finally agreed with IRAS, such adjustments are taken up as an adjustment to the Taxable Income
for the next distribution following the agreement with IRAS.
The above tax transparency ruling does not apply to gains from the sale of real estate properties in Singapore
and other income not constituting Taxable Income. Tax on such gains or profits will be assessed, in accordance
with Section 10(1)(a) of the Income Tax Act, and collected from the Trust. Consequently, if such after-tax
gains or profits are distributed, the Trust will not have to make a further deduction of income tax from the
distribution. Where the gains are agreed with IRAS to be capital gains, it will not be assessed to tax and the
Trust may distribute the capital gains without tax being deducted at source.
(b)
Tax Ruling 2
Under Tax Ruling 2 obtained from the MOF, subject to satisfying certain conditions, the distributions received
from Central Park Landholding Trust (“CPLT”) that are paid out of income derived from the underlying
Australian properties (including capital gains from the disposal of the Australian properties) that are subject
to Australian tax are exempt from Singapore income tax when received by Frasers Investment 1.
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(c)
Tax Ruling 3
Tax Ruling 3 grants income tax exemption in Singapore on certain foreign income receivable from Caroline
Chisholm Centre in Australia. The income tax exemption is granted under Section 13(12) of the Income
Tax Act. The foreign income to which income tax exemption is granted under Tax Ruling 3 includes foreign
dividends and foreign sourced interest income. As the income is exempt from Singapore income tax, the
Trust may distribute such income, after deduction of its tax-deductible expenses, to Unitholders without tax
deduction at source.
(d)
Tax Ruling 4
Tax Ruling 4 grants tax transparency treatment under Section 43(2A) of the Income Tax Act in relation to
the rental income received by the Trust pursuant to a master lease agreement granted over Alexandra
Technopark. Tax Ruling 4 is subject to the same conditions as Tax Ruling 1. In addition, the tax transparency
will not apply to any amount of rental income received by the Trust that is not distributed to Unitholders in the
same year in which it was derived and such income will be subject to tax at the Trust level at the prevailing
corporate tax rate. For the purpose of complying with the “at least 90% distribution” requirement, the Series
A CPPU holders are treated no differently from the Unitholders.
2.15 Earnings per Unit (“EPU”)
The Group presents basic and diluted EPU data for its Units. Basic EPU is calculated by dividing the total return
attributable to Unitholders of the Group by the weighted average number of Units outstanding during the year.
Diluted EPU is determined by adjusting the total return attributable to Unitholders and the weighted average
number of Units outstanding for the effects of all dilutive potential Units, which comprise Series A CPPUs.
2.16Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components.
Management has determined the operating segments based on the reports reviewed by Chief Operating Decision
Makers (“CODMs”) that are used to make strategic decisions.
CODMs include Chief Executive Officer, Financial Controller, Assets Managers and Investment Manager. CODMs
review the Group’s internal reporting in order to assess performance and operations of the Group. Management has
determined the operating segments based on these assessments. The CODMs consider the business segment from
a geographic perspective as it is based on the Group’s management and internal reporting structure.
Segment results and assets include items directly attributable to a segment as well as those that are allocated on a
reasonable basis. Unallocated items mainly comprise interest income, trust expenses, finance expenses and assets
that are not attributable to any segment.
Segment capital expenditure is the total costs incurred on investment properties during the financial year.
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2.17 Distribution policy
The Trust has a policy to distribute at least 90.0% of its taxable income (other than gains from the sale of real
estate properties that are determined by IRAS to be trading gains) and tax-exempt income, with the actual level of
distribution to be determined at the discretion of the Manager. For the financial year ended 30 September 2014, the
Trust has distributed 100.0% (2013: 100.0%) of its taxable income and tax-exempt income.
Distributions are made on a quarterly basis, with the amount calculated as at 31 December, 31 March, 30 June
and 30 September each year for the three-month financial period ending on each of the said dates. In accordance
with the provisions of the Trust Deed, the Manager is required to pay distributions within 60 days of the end of each
distribution period. Distributions, when paid, will be in Singapore dollars.
2.18 Related parties
A related party is defined as follows:
(a)
(b)
A person or a close member of that person’s family is related to the Group if that person:
(i)
has control or joint control over the Group;
(ii)
has significant influence over the Group; or
(iii)
is a member of the key management personnel of the Trust’s Manager.
An entity is related to the Group and the Trust if any of the conditions applies:
(i)The entity and the Group are members of the same group (which means that each parent, subsidiary
and fellow subsidiary is related to the others).
(ii)One entity is an associate or joint venture of the other entity (or an associate or joint venture of a
member of a group of which the other entity is a member).
(iii)Both entities are joint ventures of the same third party.
(iv)One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v)The entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group. If the Group is itself such a plan, the sponsoring employers are also
related to the Group.
(vi)The entity is controlled or jointly controlled by a person identified in (a).
(vii)A person identified in (a)(i) has significant influence over the entity or is a key management personnel
of the entity (or of a parent of the entity).
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3.I nvestme n t propert i e s
Group
At beginning of the financial year
Capital expenditure
Leasing fees capitalised - net (Note 3(a))
Effects of recognising accounting income on
a straight-line basis over the lease term
Foreign currency translation differences
At end of the financial year
(a)
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
1,811,417
3,167
(102)
1,757,516
16,985
712
1,171,000
41
(43)
1,076,000
11,915
601
2,577
27,420
(19,609)
1,824,870
5,024
95,232
(64,052)
1,811,417
29
45,173
–
1,216,200
1,761
80,723
–
1,171,000
The movement for leasing fees capitalised are as follows:
Group
2014
S$’000
Additions
Amortisation
Leasing fees capitalised – net
(b)
1,807
509
(611)
(102)
(21)
1,684
Trust
2013
S$’000
2014
S$’000
2013
S$’000
1,159
1,162
(450)
712
(64)
1,807
1,127
431
(474)
(43)
–
1,084
526
921
(320)
601
–
1,127
The fair values of investment properties are determined by the following independent property valuers:
55 Market Street
Central Park
: Colliers International Consultancy & Valuation Singapore Pte Ltd
: Knight Frank Australia Pty Ltd
: Knight Frank Valuations Canberra
The Manager is responsible for the selection of the valuers. In accordance with the CIS Code, the Group
rotates the valuers at least every two years. In relying on the valuation reports, the Manager had exercised
its judgement and was satisfied that the independent valuers had appropriate professional qualifications and
recent experience in the location and category of the properties being valued, and the valuation estimates
were reflective of the current market conditions. Key valuation inputs were reported to the Board.
(c)In determining the fair values, the valuers have considered valuation techniques including direct comparison
method, income capitalisation approach and discounted cash flow analysis. Details of valuation techniques
and inputs used are disclosed in Note 26(c).
(d)As at 30 September 2014, the investment properties of the Group are subject to negative pledge and
no investment properties of the Group was pledged as security for the Group’s borrowings. As at
30 September 2013, investment properties with an aggregate value of S$1,446,000,000 were pledged for
the Group’s secured borrowings.
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4.Subsid ia r i e s
Trust
Unquoted equity shares, at cost
Redeemable preference shares, at cost
Less: Allowance for impairment losses of:
– unquoted equity shares
– redeemable preference shares
2014
S$’000
2013
S$’000
121,933
64,778
186,711
121,933
180,047
301,980
(13,764)
(7,202)
(20,966)
165,745
(48,764)
(122,471)
(171,235)
130,745
(a)Allowance for impairment losses
The movement in allowance for impairment losses on investment in subsidiaries during the financial year
is as follows:
Trust
(Reversal)/provision during the financial year
Written off
2014
S$’000
2013
S$’000
171,235
(35,000)
(115,269)
20,966
170,714
521
–
171,235
The allowance for impairment losses represent the write down of the carrying values of investments in
certain subsidiaries to their recoverable amounts. The recoverable amounts were estimated based on the
fair values of the underlying net assets held by these subsidiaries.
During the financial year, based on the fair values of the underlying assets, impairment losses of S$35,000,000
recognised in prior years in respect of Frasers Commercial Investments No. 3 Pty Ltd was reversed during
the financial year.
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4.Subsid ia r i e s ( con t ’ d )
(b)
Details of subsidiaries
Effective equity held
by the Group
2014
2013
%
%
Direct subsidiaries
Incorporated in Singapore
Frasers Commercial Sub No. 1 Pte. Ltd.(1)
FCOT Treasury Pte. Ltd.(1)
Frasers Commercial Investments No. 2 Pte. Ltd.(1)
Frasers Commercial Osaka SPC No.1 Pte. Ltd.(2), (4)
Frasers Commercial Osaka SPC No.2 Pte. Ltd.(2)
Frasers Commercial Osaka SPC No.3 Pte. Ltd.(2)
Frasers Commercial Tozai SPC No.1 Pte. Ltd.(2), (4)
Frasers Commercial Tozai SPC No.2 Pte. Ltd.(2)
Frasers Commercial Tozai SPC No.3 Pte. Ltd.(2)
100
100
100
100
100
–
100
100
–
100
100
100
100
100
100
100
–
100
100
–
100
100
Incorporated in Cayman Islands
Frasers Commercial Investments No. 3 Pty Ltd(3)
100
100
Incorporated in Singapore
Frasers Commercial Investments No. 1 Pte. Ltd.(1)
100
100
Incorporated in Australia
Central Park Landholding Trust(3)
APF Management Pty Ltd(3)
ARC Trust(3)
ARCOT Pty Limited(3)
Athllon Drive Landholding Trust(3)
Athllon Trustee Pty Ltd(3)
Athllon Management Pty Ltd(5)
100
100
100
100
100
100
–
100
100
100
100
100
100
100
Indirect subsidiaries
Notes:
Audited by members firm of Ernst & Young LLP Global in respective countries.
(1)
There is no audit requirement as these companies are in the process of striking off.
(2)
Not required to be audited.
(3)
Although the Group does not have voting rights in respect of Frasers Commercial Osaka SPC No. 1 Pte.
Ltd. and Frasers Commercial Tozai SPC No. 1 Pte. Ltd., these companies are treated as subsidiaries by
virtue of management control over the financial and operating policies of companies.
(4)
The company was voluntarily deregistered with the Australian Securities and Investments Commission
during the financial year.
(5)
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4.Subsid ia r i e s ( con t ’ d )
(c)
Disposal of subsidiaries
On 25 October 2012, the Group completed the divestment of Galleria Otemae Building, Azabu Aco Building,
and Ebara Techno-Serve Headquarters Building through the sale of all common and preferred shares in
Frasers Commercial Tozai No.2 TMK and common shares in Frasers Commercial Tozai Master Lessee KK to
Yugen Kaisha Aoyama Sogo Accounting Office for a total cash consideration of JPY 4 (less than S$1).
The analysis of the disposal of the subsidiaries is as follows:
Investment property held for sale
Restricted cash and deposits
Prepayments
Security deposits
Current income tax liabilities
Total net identifiable liabilities disposed
Realisation of foreign currency translation differences
Gain on divestment
Consideration received(1)
Less: Cash and cash equivalents in subsidiaries disposed of
Net cash outflow from disposal of subsidiaries
2014
S$’000
2013
S$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(93,298)
(13,096)
(5,358)
(212)
(43)
1,997
6,913
26
107,874
4,803
13,352
18,155
(18,155)
–
(13,096)
(13,096)
Less than S$500.
(1)
5.
Loan to a s ub s i d i a ry
The loan to a subsidiary is unsecured, bears interest at a fixed interest rate of 7.65% per annum (2013: 7.65%) and
is repayable in cash on 19 September 2022 or such dates that may be agreed.
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6.
7.
Fix ed ass et s
Furniture
and Fittings
S$’000
Equipment
S$’000
Computers
S$’000
Total
S$’000
Group and Trust
Cost
At 1 October 2012
Additions
At 30 September 2013 and 1 October 2013
Additions
At 30 September 2014
39
–
39
6
45
23
22
45
11
56
22
–
22
5
27
84
22
106
22
128
Accumulated depreciation
At 1 October 2012
Depreciation for the year
At 30 September 2013 and 1 October 2013
Depreciation for the year
1
8
9
8
17
8
6
14
10
24
11
3
14
2
16
20
17
37
20
57
Net carrying amount
28
32
11
71
30
31
8
69
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
1,026
1,245
4
1,246
936
9
664
1,245
4
427
918
9
–
716
2,991
–
366
2,557
112,551
21
114,485
110,009
–
111,363
T r ade an d other recei va bles
Group
Trade receivables
Deposits
Interest receivable
Other receivables from:
– subsidiaries
– others
Trust
Trade receivables are recognised at their original invoiced amounts which represent their fair values on initial
recognition.
Amounts due from subsidiaries are non-trade related, unsecured, interest-free and repayable upon demand in cash.
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7.
T r ade an d other recei va ble s ( cont’ d)
(a)
Trade receivables that are past due but not impaired
The ageing analysis of trade receivables that are past due at balance sheet date but not impaired is as follows:
Group
Less than 30 days
30 to 60 days
61 to 90 days
91 to 120 days
More than 120 days
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
905
101
14
1
5
1,026
1,167
72
3
1
3
1,246
607
37
14
1
5
664
348
72
3
1
3
427
(b)Allowance for impairment losses on trade and other receivables
The movements in allowance for impairment losses on trade and other receivables during the financial year
are as follows:
Group
Impairment losses
Write-off of allowance against gross receivables
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
–
–
–
–
–
–
–
–
–
137
(137)
–
–
347
(347)
–
The allowance for impairment losses of receivables is made based on management’s assessment of the
amount that is expected to be recoverable.
Based on historical default rates, the Group believes that no other allowance for impairment losses is
necessary in respect of trade and other receivables. These receivables relate mainly to customers that have
a good payment record with the Group.
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8.
D er ivat i ve f i n a n c i a l i n s trume nts
Group
Contract/
Notional
amount
S$’000
2014
Forward currency contracts
Interest rate derivative
financial instruments
2013
Interest rate derivative
financial instruments
Trust
Fair value
Assets
Liabilities
S$’000
S$’000
Contract/
Notional
amount
S$’000
Fair value
Assets
Liabilities
S$’000
S$’000
5,689
247
–
5,689
247
–
320,596
326,285
384
631
(1,167)
(1,167)
200,000
205,689
384
631
(479)
(479)
7,044
–
(55)
7,044
–
(55)
357,444
364,488
627
627
(3,435)
(3,490)
233,000
240,044
627
627
(698)
(753)
As at 30 September 2014, the fixed interest rates of the outstanding interest rate derivative financial instruments
is between 0.64% to 4.60% (2013: 0.64% to 4.60%) while the floating interest rates are linked to the Singapore
dollar swap-offer rate (“SOR”) and Australian dollar bank bill swap bid rate (“BBSY”) rate as applicable to the
Group’s borrowings.
Forward currency contracts are used to hedge foreign currency risk arising from the receipts of distributions from
the Australian properties denominated in Australian dollars for which firm commitments existed at the end of the
reporting period.
9.
Cash and b a n k b a l a n ces
Group
Fixed deposits
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
31,538
15,834
47,372
24,875
17,664
42,539
26,095
15,834
41,929
20,194
17,664
37,858
The weighted average effective interest rates of cash and cash equivalents at the reporting date for the Group and
the Trust are 0.52% (2013: 0.50%) and 0.59% (2013: 0.60%) per annum respectively.
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10 . In terest - be a r i n g borrowi n g s
Group
Term loans (secured)
Term loans (unsecured)
Unamortised borrowing costs
Maturity of borrowings
– within one year
– between one and five years
(a)
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
–
698,590
698,590
(6,485)
692,105
573,725
127,500
701,225
(1,766)
699,459
–
545,000
545,000
(5,052)
539,948
415,000
127,500
542,500
(1,239)
541,261
–
692,105
692,105
127,383
572,076
699,459
–
539,948
539,948
127,383
413,878
541,261
Terms and debt repayment schedule
Terms and conditions of outstanding borrowings as at balance sheet date are as follows:
Interest
rate range
%
Financial
year of
maturity
Face value
S$’000
Carrying
amount
S$’000
Group
2014
1.24 – 4.43
2017 – 2019
698,590
692,105
2013
1.78 – 5.31
0.71 – 0.75
2015 – 2017
2014
573,725
127,500
701,225
572,076
127,383
699,459
Trust
2014
1.24 – 1.56
2017 – 2019
545,000
539,948
2013
1.78 – 2.21
0.71 – 0.75
2015 – 2017
2014
415,000
127,500
542,500
413,878
127,383
541,261
The secured terms loans in 2013 were secured by mortgage over certain investment properties of the Group.
All borrowings of the Group as at 30 September 2014 are unsecured.
The Group’s borrowings bear floating interest rates at SOR plus margin for the Singapore dollars denominated
borrowings and at BBSY plus margin for the Australian dollars denominated borrowings. The interest rate
range disclosed above excludes the effects of the related interest rate derivative financial instruments.
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11 . D eferred ta x l i a b i l i t i e s
Deferred tax liabilities of the Group are attributable to the following:
Group
Investment properties:
Recognised in statement of total return
12 . 2014
S$’000
2013
S$’000
67,686
(3,370)
(2,039)
62,277
67,662
6,616
(6,592)
67,686
T r ade an d other paya bles
Group
Trade payables
Net GST payable
Accrued operating expenses
Series A CPPU distribution payable
Income received in advance
Fees payable to the Manager
Fees payable to the Property Manager
Fees payable to the Trustee
Interest payable
Tax payable
Withholding tax payable
Other payables to:
– subsidiaries
– related parties
– others
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
290
1,370
6,089
1
7,505
3,053
525
140
762
–
396
777
1,044
7,461
169
2,798
2,969
429
141
1,980
2,697
408
290
703
4,164
1
872
3,053
525
140
313
–
296
477
478
4,270
169
103
2,969
429
141
935
–
302
–
571
1,000
21,702
–
–
682
21,555
35,029
571
1,000
46,957
–
36,945
681
47,899
Trade payables are non-interest bearing and are normally settled on 30-day terms.
The Series A CPPU distribution payable is related to Series A CPPU distribution for the period from 1 July 2014 to
30 September 2014 (2013: 1 July 2013 to 30 September 2013) which was paid to CPPU holders on 1 October 2014
(2013: 1 October 2013).
Amounts due to subsidiaries are non-trade related, unsecured, interest-free and are repayable upon demand in cash.
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13 . U n itholder s ’ fun d s
Group and Trust
Number of Units
2014
2013
‘000
‘000
Units issued:
Issuance of Units:
Management fees paid in Units
Conversion of Series A CPPUs to Units (Note 14(a))
Distribution paid in Units
Units to be issued:
Management fees payable in Units
Conversion of Series A CPPUs to Units (Note 31(a))
Issued and issuable Units at end of the financial year
657,539
643,708
3,705
10,113
5,328
676,685
6,674
7,157
–
657,539
–
676,685
68
676,753
1,540
659,079
9,372
668,451
The rights and interests of Unitholders are contained in the Trust Deed and include the rights to:
•receive distribution entitlement determined in accordance with the Trust Deed;
•participate in the termination of the Trust by receiving a share of the net proceeds of realisation among the
Unitholders pro rata in accordance with the number of Units held by the Unitholders and in accordance with
the winding up procedures under the Trust Deed;
•attend all Unitholders’ meetings. The Trustee or the Manager may (and the Manager shall at the request in
writing of not less than 50 Unitholders or Unitholders representing not less than 10.0% of the Units in issue)
convene a meeting of Unitholders in accordance with the provisions of the Trust Deed; and
•one vote per Unit.
The restrictions on an Unitholder include the following:
•An Unitholder has no equitable or proprietary interest in the assets of the Trust and is not entitled to the
transfer to it of any assets of the Trust or of any estate and interest in any assets of the Trust;
•An Unitholder’s right is limited to the right to require due administration of the Trust in accordance with the
provisions of the Trust Deed; and
•An Unitholder has no right to request for redemption of their Units while the Units are listed on SGX-ST.
An Unitholder’s liability is limited to the amount paid or payable for any Units in the Trust. The provisions of the Trust
Deed provide that no Unitholders will be personally liable to indemnify the Trustee or the Manager or a creditor of
either or both of them against any liability of the Trustee or the Manager in respect of the Trust.
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14 . Serie s A Co n verti ble P erpetu al P referred Unitholder s’ funds
Group and Trust
Number of Series
A CPPUs
2014
2013
‘000
‘000
Series A CPPUs issued:
Conversion of Series A CPPUs to Units
12,157
(11,979)
(97)
81
342,500
(8,478)
(321,865)
12,157
On 26 August 2009, the Trust issued 342.5 million Series A CPPUs of S$1.00 per Series A CPPU, in full satisfaction
of the purchase consideration of Alexandra Technopark on the terms and subject to the conditions set out in the
Subscription Agreement dated 26 August 2009 among the Manager, FCL Trust Holdings (Commercial) Pte. Ltd. and
FCL Investments Pte. Ltd.. The following are the principal terms and conditions:
•the Series A CPPU holders have the right to receive preferential non-cumulative distribution of an amount
equivalent to 5.5% per annum of the issue price which may be declared by the Manager at its sole discretion;
•any Preferred Distribution or part thereof not due or payable shall not accumulate for the benefit of the
Series A CPPU holders or entitle the Series A CPPU holders to any claim in respect thereof against the Trust,
the Trustee and/or the Manager;
•the Series A CPPUs rank senior to the Units in respect of the entitlement to participate in the distributions
of the Trust and rank senior to the Units in respect of the entitlement to receive out of the assets of the Trust
the amount equivalent to the number of Series A CPPUs held by the Series A CPPU holder multiplied by the
issue price and outstanding preferred and special preferred distribution upon the liquidation of the Trust;
•the Series A CPPU holders have the sole right to convert the Series A CPPUs into Units (“Conversion Units”)
on specific conversion dates after a period of three years commencing from the date of issuance of the
Series A CPPUs (“Restriction Period”), at a conversion price of S$1.1845;
•the Series A CPPU holders do not have the right to attend and vote at meeting of Unitholders except during
such period as the preferred or special preferred distribution remains in arrears and unpaid for at least 12
months, or upon any resolution which varies or abrogates any right, preference or privilege of the Series A
CPPUs, or upon any resolution for the dissolution or winding up of the Trust; and
•the Manager shall have the sole right to redeem any number of Series A CPPUs on specific redemption dates
on a pro rata basis at the issue price after the Restriction Period.
(a)
Conversion of Series A CPPUs
During the financial year, 11,978,796 (2013: 8,478,411) Series A CPPUs were converted into 10,112,783 (2013:
7,157,615) Conversion Units (Note 13).
(b)
During the financial year, 97,729 (2013: 321,864,314) Series A CPPUs were redeemed by the Trust at S$1.00
per Series A CPPU.
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15 . G ro ss reven ue
Group
Property rental income
Dividend income from subsidiaries
Management fee income from subsidiaries
Other property income
Contingent rent, included in gross revenue:
– based on tenants’ turnover
– based on counterparties’ net operating income
16 . Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
104,243
–
–
14,595
118,838
103,579
–
–
14,618
118,197
57,990
18,790
2,569
2,487
81,836
53,407
19,501
2,754
1,928
77,590
209
–
209
177
144
321
209
–
209
166
–
166
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
611
1,559
376
4,915
8,987
3,420
5,984
72
2,360
28,284
488
1,357
379
4,890
8,280
3,153
6,380
47
2,287
27,261
474
–
124
1,814
3,903
2,870
4,081
39
593
13,898
320
–
101
1,658
3,343
2,466
4,097
33
558
12,576
Property operat i n g e x pen s e s
Group
Amortisation of leasing fees capitalised
Council rates
Insurance
Property management and other related fees
Property maintenance expenses
Property tax
Utilities
Valuation fees
Other operating expenses
118
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17 . In terest i n come
Group
Interest income on:
– bank deposits
– loan to a subsidiary
18 . Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
238
–
238
709
–
709
168
7,695
7,863
433
8,257
8,690
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
11,880
554
129
46
1,069
169
13,847
11,681
565
132
44
1,627
203
14,252
11,880
554
96
46
553
415
13,544
11,681
565
93
44
1,135
156
13,674
T ru st e x pen s e s
Group
Management fees
Trustee’s fees
Audit fees
Non-audit fees paid to the auditors of the Trust
Professional and legal fees
Other expenses
19 . Trust
Fin an ce e x pen s e s
Group
Interest expenses
Capitalised borrowing costs expensed off
Amortisation of borrowing costs
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
18,868
852
1,042
20,762
19,773
939
1,016
21,728
10,221
700
658
11,579
9,895
324
577
10,796
The capitalised borrowing costs expensed off in 2014 was due to early refinancing of all loan facilities in September
2014. The capitalised borrowing costs expensed off during 2013 was attributable to the early partial prepayment of
certain loan facilities.
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20 . Taxat io n
Group
Current tax expense
– Overseas income tax
– (Under)/over-provision in respect of prior financial years
Deferred tax expense
– Origination and reversal of temporary differences
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
(1,442)
(75)
(1,517)
(377)
(1,355)
(1,732)
–
–
–
–
10
10
3,370
1,853
(6,616)
(8,348)
–
–
–
10
The relationship between income tax expense and the product of accounting profit multiplied by the applicable
corporate tax rate for the years ended 30 September 2014 and 30 September 2013 are as follows:
Group
Tax at the domestic rates applicable to profits
in the countries where the Group and Trust operate
Income not subject to tax
Expenses not deductible for tax purposes
Tax transparency
Tax exempt income
Deferred tax expense
Utilisation of unrecognised tax losses
(Under)/over-provision in respect of prior financial years
Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
85,372
170,116
126,156
113,416
(21,245)
13,091
(4,265)
5,845
3,766
3,370
1,366
(75)
1,853
(30,245)
24,112
(5,002)
5,845
4,001
(6,616)
912
(1,355)
(8,348)
(21,446)
13,857
(2,022)
5,845
3,766
–
–
–
–
(19,281)
14,022
(4,587)
5,845
4,001
–
–
10
10
The corporate income tax rate applicable to the Trust and Singapore entities of the Group was 17% (2013: 17%). The
corporate income tax rate applicable to the Australian entities of the Group were 30% (2013: 30%).
The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.
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21 . E ar n ing s per U n i t
Basic earnings per Unit is calculated by dividing the total return for the financial year after income tax, before
distribution, by the weighted average number of Units during the financial year.
Group
2014
S$’000
2013
S$’000
87,225
(21)
87,204
161,768
(7,424)
154,344
Basic earnings per Unit
Weighted average number of Units during the financial year (‘000)
Basic earnings per Unit (cents)
671,404
12.99
653,407
23.62
Diluted earnings per Unit
Weighted average number of Units during the financial year (‘000)
Diluted earnings per Unit (cents)
671,472
12.99
663,671
23.62(1)
Distribution payable to Series A CPPU holders
Earnings attributable to Unitholders
The diluted earnings per Unit is the same as basic earnings per Unit as the potential effects of the conversion of
Series A CPPUs into Units are antidilutive.
(1)
In computing the fully diluted earnings per Unit, the total return for the financial year after tax, before distribution,
and the weighted average number of Units during the financial year are adjusted for the effects of all dilutive potential
Units arising from the assumed conversion of the Series A CPPUs at the conversion price of S$1.1845 to Units.
22 . C omm itme n t s a n d con t i n gen c i es
(a) Operating lease commitments – lessor
The Group leases out its investment properties. Non-cancellable operating lease rental receivables are as
follows:
Group
Within one year
Between one and five years
After five years
(b) Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
110,244
235,118
159,569
504,931
86,168
273,299
192,105
551,572
73,082
103,911
–
176,993
52,843
137,858
2,015
192,716
Guarantee
The Trust has provided corporate guarantee amounting to S$153,590,000 (2013: S$158,725,000) to banks for
loan taken by a subsidiary.
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23 . S ig n if ica n t rel ated pa rty tra nsact ions
In the normal course of the operations of the Group, management fees, property management fees and trustee’s
fees have been paid or are payable to the Manager, Property Manager and the Trustee respectively.
During the financial year, other than as disclosed elsewhere in the financial statements, significant related party
transactions, which were carried out in the normal course of business on terms agreed between the parties, are
as follows:
Group
2014
S$’000
2013
S$’000
With related companies of the Manager
– Property rental and other income received/receivable
– Recovery of expenses paid/payable on behalf
– Reimbursement of expenses paid/payable on behalf
19,882
124
(228)
22,000
141
(101)
With the Manager
– Base management fees paid/payable
– Performance management fees paid/payable
– Reimbursement of expenses paid on behalf
(9,026)
(2,854)
(62)
(8,807)
(2,874)
(83)
With the Property Manager
– Property management fees paid/payable
– Leasing commission and other expenses paid/payable
(1,814)
(1,152)
(1,658)
(1,031)
(554)
(565)
With the Trustee
– Trustee’s fees paid/payable
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24 . C l assif i cat i o n of f i n a n c i a l i n s truments
The table below summarises the accounting classification of the Group’s and Trust’s financial assets and financial
liabilities at the balance sheet date:
Group
Loans and receivables
Financial assets at fair value through profit or loss
Financial liabilities at amortised cost
Security deposits
Financial liabilities at fair value through profit or loss
25 . Trust
2014
S$’000
2013
S$’000
2014
S$’000
2013
S$’000
–
2,991
47,372
50,363
–
2,557
42,539
45,096
98,990
114,485
41,929
255,404
102,148
111,363
37,858
251,369
631
627
631
627
692,105
12,589
14,197
718,891
699,459
7,200
18,757
725,416
539,948
12,589
46,085
598,622
541,261
7,200
47,796
596,257
1,167
3,490
479
753
Fin an c ia l r i s k m a n ageme n t
Risk management is integral to the business of the Group. The Group has a system of controls in place to create
an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management
continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and
control is achieved.
(a)
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle
its financial and contractual obligations to the Group, as and when they fall due.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Manager has established credit limits for tenants and monitors their balances on
an ongoing basis. Credit evaluations are performed by the Manager before lease agreements are entered
into with tenants. Credit risk is also mitigated by the rental deposits held for each of the tenants. Information
regarding financial assets that are either past due or impaired is disclosed in Note 7.
123
Frasers
Commercial
Trust
N O T E S
TO
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F I N A N C I A L
S TAT E M E N T S
3 0 SE P T EM B ER 2 0 1 4
25 . Fin an c ia l r i s k m a n ageme n t ( cont’ d)
(a)
Credit risk (cont’d)
Cash and bank deposits are placed with financial institutions which are regulated. The credit risk related to
derivative financial instruments arises from the potential failure of counterparties to meet their obligations
under the contracts. It is the Group’s policy to enter into derivative financial instruments transactions with
credit worthy counterparties.
The Group and Trust have no significant concentration of credit risk at the balance sheet date. The maximum
exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.
(b)
Foreign currency risk
The Group has transactional currency exposures arising from transactions that are denominated in a
currency other than the respective functional currencies of the entities within the Group. The entities within
the Group customarily conduct their business in their respective functional currencies.
The Trust’s foreign currency risk mainly relates to its Australian Dollar denominated investments and
distribution income from its foreign subsidiaries. The Manager monitors the Trust’s foreign currency
exposure on an on-going basis and limits its exposure to adverse movements in foreign currency exchange
rates by using derivative financial instruments or other suitable financial products.
It is the Manager’s policy to fix the Trust’s anticipated foreign currency exposure in respect of distribution
income, net of anticipated payments required in the same currency, from its foreign subsidiaries at least
six months forward by using foreign currency forward exchange contracts and certain currency derivatives.
Investment in overseas assets are hedged naturally to the extent that borrowings are taken up in their
respective foreign currency. The net position of the foreign exchange risk of these investments in overseas
assets are not hedged as such investments are long term in nature.
The Group’s and Trust’s exposures to foreign currencies are as follows:
Group
Trust
Amount due from subsidiaries
Amount due to subsidiaries
Australian
Dollar
S$’000
2014
Japanese
Yen
S$’000
Australian
Dollar
S$’000
2013
Japanese
Yen
S$’000
14,236
166
8,840
188
98,990
118,989
14,236
(29,163)
203,052
–
–
166
–
166
102,148
112,712
8,840
(26,045)
197,655
–
(6)
188
(1,605)
(1,423)
As at 30 September 2014, the Group had outstanding foreign currency contracts with notional amount of
approximately S$5,689,000 (2013: S$7,044,000).
124
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F I N A N C I A L
S TAT E M E N T S
3 0 S EPTE M B ER 2 0 1 4
25 . Fin an c ia l r i s k m a n ageme n t ( cont’ d)
(b)
Foreign currency risk (cont’d)
Sensitivity analysis
A 10% strengthening of the Singapore dollar against the following foreign currencies at the reporting date
would have increased/(decreased) the total return by the amounts shown below. This analysis assumes that
all other variables, in particular interest rates, remain constant.
Australian
Dollar
S$’000
2014
Japanese
Yen
S$’000
Australian
Dollar
S$’000
2013
Japanese
Yen
S$’000
Group
Decrease in total return for the financial year
– 10% strengthening on the Singapore dollar
(1,424)
(17)
(884)
(19)
Trust
(Decrease)/increase in total return for the
financial year
– 10% strengthening on the Singapore dollar
(20,305)
(17)
(19,765)
142
A weakening of the Singapore dollar against the above currencies at the reporting date would have had the
equal but opposite effect on the amounts shown above, on the basis that all other variables remain constant.
(c)Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will
fluctuate because of changes in market interest rates.
The Group’s exposure to changes in interest rates relate primarily to its interest-earning financial assets
and interest-bearing borrowings. Interest rate risk is managed by the Manager on an ongoing basis with
the primary objective of limiting the extent to which net interest expense could be affected by adverse
movements in interest rates. The Manager adopts a policy of fixing the interest rates for a portion of its
outstanding borrowings via the use of derivative financial instruments or other suitable financial products.
Interest rate derivatives in respect of the Group’s borrowings have been entered into to achieve an appropriate
mix of fixed and floating rate exposures within the Group’s policy. Generally, the maturities of these interest
rate derivatives follow the maturities of the related borrowings.
As at 30 September 2014, the Group and Trust had interest rate derivatives with notional contract amounts
of S$320.6 million (2013: S$357.4 million) and S$200.0 million (2013: S$233.0 million).
Sensitivity analysis
A 1.0% increase/(decrease) in interest rates on the portion of the Group’s borrowings that is not hedged, with
all other variables held constant, would (decrease)/increase the Group’s total return for the financial year by
S$3.8 million (2013: S$3.4 million).
125
126
(d)
Net undiscounted financial assets/
(liabilities)
9,453
(1,167)
–
(16,004)
(2,668)
(21,702)
(41,541)
(756,321)
–
(698,590)
(47,810)
(9,921)
–
(756,321)
–
–
–
–
–
–
–
–
–
–
–
–
–
(746,868)
(1,167)
(698,590)
(63,814)
(12,589)
(21,702)
(797,862)
–
–
2,991
631
47,372
50,994
105,776
(479)
–
(8,738)
(2,668)
(46,957)
(58,842)
–
7,573
114,485
631
41,929
164,618
(552,237)
–
(545,000)
(27,607)
(9,921)
–
(582,528)
–
30,291
–
–
–
30,291
121,459
–
–
–
–
–
–
98,990
22,469
–
–
–
121,459
(325,002)
(479)
(545,000)
(36,345)
(12,589)
(46,957)
(641,370)
98,990
60,333
114,485
631
41,929
316,368
F I N A N C I A L
Financial liabilities
Interest payable on borrowings
Security deposits
–
–
–
–
–
–
T H E
–
–
2,991
631
47,372
50,994
Total
S$’000
TO
2014
Financial assets
Interest receivable on loan to a subsidiary
Total
S$’000
Trust
Between
Within
one and More than
one year five years five years
S$’000
S$’000
S$’000
N O T E S
Group
Between
Within
one and More than
S$’000
S$’000
S$’000
The table below summarises the maturity profile of the Group’s and Trust’s financial assets and financial liabilities at the balance sheet date
based on contractual undiscounted repayment obligations:
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations due to shortage of funds. The Manager
monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Group’s operations for a reasonable period,
including the servicing of financial obligations, and to mitigate the effects of fluctuations in cash flows. In addition, the Manager also monitors
and observes the CIS Code issued by the MAS concerning limits on total borrowings.
Liquidity risk
Fi nan ci al r isk ma nagement (cont’ d)
2 5.
Frasers
Commercial
Trust
S TAT E M E N T S
3 0 SE P T EM B ER 2 0 1 4
(d)
(127,959)
(597,555)
(10)
(725,524)
(3,490)
(701,225)
(37,777)
(7,200)
(21,555)
(771,247)
–
–
2,557
627
42,539
45,723
(29,684)
(753)
(127,500)
(9,691)
(1,503)
(47,899)
(187,346)
–
7,814
111,363
627
37,858
157,662
(405,052)
–
(415,000)
(15,644)
(5,687)
–
(436,331)
–
31,279
–
–
–
31,279
133,181
–
–
–
(10)
–
(10)
102,148
31,043
–
–
–
133,191
(301,555)
(753)
(542,500)
(25,335)
(7,200)
(47,899)
(623,687)
102,148
70,136
111,363
627
37,858
322,132
F I N A N C I A L
Net undiscounted financial (liabilities)/
assets
–
–
–
(10)
–
(10)
–
–
–
–
–
–
Total
S$’000
T H E
–
(573,725)
(18,143)
(5,687)
–
(597,555)
–
–
–
–
–
–
Total
S$’000
Trust
Between
Within
one and More than
S$’000
S$’000
S$’000
TO
(3,490)
(127,500)
(19,634)
(1,503)
(21,555)
(173,682)
–
–
2,557
627
42,539
45,723
Group
Between
Within
one and More than
S$’000
S$’000
S$’000
N O T E S
Interest payable on borrowings
Security deposits
2013
Financial assets
Interest receivable on loan to a subsidiary
Liquidity risk (cont’d)
Fi nan ci al r isk ma nagement (cont’ d)
2 5.
annual
report
2014
S TAT E M E N T S
3 0 S EPTE M B ER 2 0 1 4
127
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Commercial
Trust
N O T E S
TO
T H E
F I N A N C I A L
S TAT E M E N T S
3 0 SE P T EM B ER 2 0 1 4
26 . Fair value of a ss et s a n d l i a b i lities
(a)
Fair value hierarchy
The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy has the following levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices included within Level 1 that are observable from the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 – Inputs from the asset or liability that are not based on observable market data (unobservable inputs)
There have been no transfers between levels during the financial years ended 30 September 2014 and
30 September 2013.
The following table shows an analysis of each class of assets and liabilities measured at fair value at the end
of the reporting period:
2014
Group
Financial assets
Interest rate derivative financial instruments
Non-financial assets
Trust
Financial assets
Non-financial assets
128
Level 2
S$’000
Level 3
S$’000
Total
S$’000
247
384
631
–
–
–
247
384
631
–
1,824,870
1,824,870
(1,167)
–
(1,167)
247
384
631
–
–
–
247
384
631
–
1,216,200
1,216,200
(479)
–
(479)
annual
report
2014
N O T E S
TO
T H E
F I N A N C I A L
S TAT E M E N T S
3 0 S EPTE M B ER 2 0 1 4
26 . Fair value of a ss et s a n d l i a b i lities (cont’ d)
(b)
Level 2 fair value measurements
Forward currency contracts and interest rate derivative financial instruments are valued using present value
calculations by applying market observable inputs existing at each balance sheet date into forward pricing
and swap models. The models incorporate various inputs including the credit quality of counterparties,
foreign exchange spot and forward rates, interest rate curves and forward rate curves.
(c) Level 3 fair value measurements
(i)Information about significant unobservable inputs
The following table presents the valuation techniques and key inputs that were used to determine the
fair value of investment properties categorised under Level 3 of the fair value hierarchy.
Valuation techniques
Key unobservable
inputs
Range of
unobservable inputs
Group
Trust
Relationship of unobservable
inputs to fair value
Income capitalisation Capitalisation rate 3.75 - 7.38% 3.75 - 6.50% The estimated fair values
approach
varies inversely against the
capitalisation rate.
Discounted cash flow Discount rate
6.50 - 9.15% 6.50 - 7.50% The estimated fair values
analysis
varies inversely against the
discount rate.
(d)
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year (including
trade and other receivables, cash and cash equivalents, security deposits and trade and other payables) are
assumed to approximate their fair values due to their short term nature.
The carrying values of non-current variable-rate interest-bearing borrowings approximate their fair values
as they are floating rate instruments that are re-priced to market interest rate on or near balance sheet date.
The carrying amounts and fair value of non-current security deposits and loan to a subsidiary that are not
carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:
2014
Carrying
amount
S$’000
Group
Security deposits (Non-current)
Trust
Security deposits (Non-current)
2013
Fair value
S$’000
Carrying
amount
S$’000
Fair value
S$’000
9,921
9,443
5,697
5,258
9,921
98,990
9,443
110,061
5,697
102,148
5,258
114,500
The above fair values, which are determined for disclosure purposes, are estimated by discounting expected
cash flows at market incremental lending rates for similar types of lending or borrowing arrangements at
the balance sheet date.
129
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Commercial
Trust
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F I N A N C I A L
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27 . Cap ital m a n ageme n t
The primary objective of the Group’s and Trust’s capital management is to ensure that it maintains an optimal
capital structure to support the business and maximise Unitholders’ value.
Under the Property Fund Guidelines of the CIS Code, the aggregate leverage should not exceed 35.0% of the
deposited property. The aggregate leverage may exceed 35.0% (up to a maximum of 60.0%) only if a credit rating
is obtained and disclosed to the public. The Group has been assigned a corporate rating of “Baa3” from Moody’s
Investor Services on 5 June 2013.
The gearing ratio is calculated as gross borrowings divided by total assets, based on the latest valuations.
Group
Gross borrowings (Note 10)
Total assets
Gearing ratio
2014
S$’000
2013
S$’000
698,590
701,225
1,881,828
1,862,544
37.1%
37.6%
The Group is in compliance with all externally imposed capital requirements for the financial years ended
30 September 2013 and 2014.
28 . O per at in g s egme n t s
Segment information is presented in respect of the Group’s geographical segments. For the purpose of the
assessment of segment performance, the Group’s CODMs have focused on its investment properties which in turn,
are segregated based on geographical areas. This forms the basis of identifying the operating segments of the
Group under FRS 108 Operating Segments.
The accounting policies of the reportable segments are as described in Note 2.16. Segment property income
represents income generated from its tenants/sub-lessees and income earned by each segment after allocating
property operating expenses. This is the measure reported to the CODMs for the purpose of assessment of segment
performance.
For the purpose of monitoring segment performance, the CODMs monitor the non-financial assets as well as
financial assets attributable to each segment.
Segment results and assets include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly cash and cash equivalents and related revenue, interestbearing borrowings and expenses and trust assets and expenses. Information regarding the Group’s reportable
segments is presented in the tables below.
130
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F I N A N C I A L
S TAT E M E N T S
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28 . O per at in g s egme n t s ( con t ’ d )
(a)
Business segments
Segment information in respect of the Group’s business segments is not presented, as the Group’s activities
for the financial years ended 30 September 2014 and 30 September 2013 relate wholly to investing in real
estate and real estate-related assets in the commercial sector in Singapore and Australia.
(b)Information about reportable segments
2014
Gross revenue - external
Segment net property income
Singapore
S$’000
Australia
S$’000
Total
S$’000
60,477
(13,898)
46,579
45,173
58,361
(14,386)
43,975
(17,753)
118,838
(28,284)
90,554
27,420
117,974
Unallocated items:
– Interest income
– Trust expenses
– Finance expenses
– Exchange differences
– Net change in fair value of derivative financial instruments
– Realised gain on derivative financial instruments
Taxation
Reportable segmental non-current assets
Reportable segmental current assets
Total assets for reportable segments
Capital expenditure
238
(13,847)
(20,762)
(622)
2,274
117
85,372
1,853
87,225
1,216,271
2,235
1,218,506
608,670
6,532
615,202
1,824,941
8,767
1,833,708
41
3,126
3,167
131
Frasers
Commercial
Trust
N O T E S
TO
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F I N A N C I A L
S TAT E M E N T S
3 0 SE P T EM B ER 2 0 1 4
28 . O per at in g s egme n t s ( con t ’ d )
(b)Information about reportable segments (cont’d)
2013
Gross revenue - external
Segment net property income
Singapore
S$’000
Australia
S$’000
Japan
S$’000
Total
S$’000
55,336
(12,576)
42,760
80,723
62,339
(14,439)
47,900
14,509
522
(246)
276
–
118,197
(27,261)
90,936
95,232
186,168
Unallocated items:
– Interest income
– Trust expenses
– Finance expenses
– Exchange differences
– Net change in fair value of derivative financial
instruments
– Gain on divestment
– Realised gain on derivative financial
instruments
Taxation
Reportable segmental non-current assets
Reportable segmental current assets
Capital expenditure
(c)
709
(14,252)
(21,728)
(1,273)
2,046
18,155
291
170,116
(8,348)
161,768
1,171,069
1,370
1,172,439
640,417
6,182
646,599
–
–
–
1,811,486
7,552
1,819,038
11,915
5,070
–
16,985
Reconciliations of reportable segment revenues, total return, assets and other material items
Group
(d)
2014
S$’000
2013
S$’000
Revenue
Total revenue for reportable segments
118,838
118,197
Total return
Total return for reportable segments
Unallocated items
Consolidated total return
117,974
(30,749)
87,225
186,168
(24,400)
161,768
Assets
Unallocated assets
Consolidated assets
1,833,708
48,120
1,881,828
1,819,038
43,506
1,862,544
Major customers
Certain investment properties are leased individually to a single lessee. The contribution of these single
lessees to the gross revenue of the Group was S$43,690,000 (2013: S$47,334,000). Such revenue is
attributable to the Singapore segment and Australia segment.
132
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29 . Fin an c ia l r at i o s
Group
Expenses to weighted average net assets(1)
– with performance fee
– without performance fee
Portfolio turnover ratio(2)
Trust
2014
%
2013
%
2014
%
2013
%
1.30
1.04
1.27
1.02
1.41
1.11
1.35
1.07
–
–
–
–
The annualised ratios are computed in accordance with the guidelines of the Investment Management
Association of Singapore. The expenses used in the computation relate to expenses at the Group and Trust level,
excluding property operating expenses, interest expenses, exchange differences, tax deducted at source and
costs associated with the purchase and sales of investments.
(1)
The annualised ratios are computed based on the lesser of purchases or sales of underlying investments of the
Group and Trust expressed as a percentage of daily average net asset value.
(2)
30 . Standard s i ss ued but n ot yet effect ive
The Group and Trust have not adopted the following standards and interpretations that are relevant to the Group that
have been issued but not yet effective:
Description
Revised FRS 27
Amendments to FRS 110, FRS 111 and FRS 112
FRS 110
FRS 111
FRS 112
Improvements to FRSs (January 2014)
Improvements to FRSs (February 2014)
Separate Financial Statements
Offsetting of Financial Assets and
Financial Liabilities
Recoverable Amount Disclosures for
Non-Financial Assets
Novation of Derivatives and Continuation of
Hedge Accounting
Transition Guidance
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Effective for
annual periods
beginning
on or after
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
Business Combinations
Operating Segments
Property, Plant and Equipment
Related Party Disclosures
1 July 2014
1 July 2014
1 July 2014
1 July 2014
Business Combinations
Fair Value Measurement
Investment Property
1 July 2014
1 July 2014
1 July 2014
133
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Commercial
Trust
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30 . Standard s i ss ued but n ot yet effect ive (cont’ d)
The Manager expects that the adoption of the above standards and interpretations will have no material impact
to the financial statements in the period of initial application, except for the following revised and new FRS as
described below:
(a)
FRS 111 Joint Arrangements
FRS 111 classifies joint arrangements either as joint operations or joint ventures. Joint operation is a joint
arrangement whereby the parties that have rights to the assets and obligations for the liabilities whereas
joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the arrangement.
FRS 111 requires the determination of joint arrangement’s classification to be based on the parties rights
and obligations under the arrangement, with the existence of a separate legal vehicle no longer being the
key factor.
The Group has an investment in joint arrangement. The Group has re-evaluated the rights and obligations of
the parties to the joint arrangement and has determined that the parties in the joint arrangement have rights
to the assets and obligations for the liabilities of the arrangement. Accordingly, the joint arrangement will
be classified as joint operation under FRS 111 and will be accounted for the assets and liabilities in respect
of its interest in a joint operation. As this is consistent with the Group’s current method of accounting, there
will be no impact to the Group’s financial statements when the Group adopts FRS 111 from 1 October 2014.
(b)
FRS 112 Disclosure of Interests in Other Entities
FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests in other
entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet
vehicles, FRS 112 requires an entity to disclose information that helps users of its financial statements to
evaluate the nature and risks associated with its interests in other entities and the effects of those interests
on its financial statements. As this is a disclosure standard, it will have no impact to the financial position
and financial performance of the Group when implemented in 2014.
31 . Subse que n t eve n t s
(a)
Conversion of Series A CPPU to Units
On 1 October 2014, consequent to the successful exercise of conversion right by certain Series A CPPU
holders on the exercise day on 1 September 2014, 80,750 Series A CPPUs were converted into 68,170 Units
(the “Conversion Units”) at a conversion price of S$1.1845. Any fractions of the Conversion Units were
disregarded.
(b)
Distribution for Unitholders
On 20 October 2014, the Trust declared a distribution of 2.2145 cents per Unit in respect of the period from
1 July 2014 to 30 September 2014.
134
annual
report
2014
U n i tholder s ’
St a t i s t i c s
A s at 2 8 N ovember 2 0 1 4
Issued and fully pa i d - up U n i t s
As at 28 November 2014
679,136,788 Units (voting rights: one vote per Unit)
Market Capitalisation S$998,331,078 (based on closing price of S$1.470 per Unit on 28 November 2014)
Top 2 0 U n itholders
As shown in the Register of Unitholders
Ranking
Unitholders
No. of Units
% of Units in Issue
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Citibank Nominees Singapore Pte Ltd
Fcl Trust Holdings (Commercial) Pte Ltd
Frasers Centrepoint Asset Management (Commercial) Ltd
Dbs Nominees Pte Ltd
Hsbc (Singapore) Nominees Pte Ltd
Raffles Nominees (Pte) Limited
DBSN Services Pte Ltd
Db Nominees (Singapore) Pte Ltd
Bank of Singapore Nominees Pte Ltd
United Overseas Bank Nominees Pte Ltd
Morgan Stanley Asia (Singapore) Securities Pte Ltd
Ocbc Securities Private Ltd
Cimb Securities (Singapore) Pte Ltd
Sunshine Bay Limited
Ocbc Nominees Singapore Private Limited
Uob Kay Hian Pte Ltd
Lim & Tan Securities Pte Ltd
Dbs Vickers Securities (Singapore) Pte Ltd
Heng Siew Eng
Bnp Paribas Securities Services Singapore Branch
Total
101,750,092
100,521,055
85,543,702
58,922,385
49,401,949
22,126,104
17,483,494
11,238,942
10,921,295
10,481,664
4,007,418
3,822,691
3,412,804
2,784,256
2,658,144
2,399,386
2,199,616
2,134,643
2,016,000
2,009,264
495,834,904
15.0
14.8
12.6
8.7
7.3
3.3
2.6
1.6
1.6
1.5
0.6
0.6
0.5
0.4
0.4
0.3
0.3
0.3
0.3
0.3
73.0
D i stribut io n of U n i tholder s
Size of Holdings
1 – 999
1,000 – 10,000
10,001 – 1,000,000
1,000,001 and above
TOTAL
No. of Unitholders
% of Unitholders
No. of Units
% of Units in Issue
875
4,608
2,857
30
8,370
10.5
55.0
34.1
0.4
100.00
344,776
22,482,423
145,719,173
510,590,416
679,136,788
0.1
3.3
21.5
75.1
100.0
135
Frasers
Commercial
Trust
U n i tholder s ’
St a t i s t i c s
Sub stan t ial U n i tholders
Name of Unitholder
FCL Trust Holdings (Commercial) Pte. Ltd.
Frasers Centrepoint Limited(2)
Thai Beverage Public Company Limited(3)
International Beverage Holdings Limited(4)
InterBev Investment Limited(5)
TCC Assets Limited(6)
Charoen Sirivadhanabhakdi(7)
Khunying Wanna Sirivadhanabhakdi(8)
Direct interest
No. of Units
Deemed interest
No. of Units
85,543,702
100,521,055
–
–
–
–
–
–
–
863,924(1)
–
186,928,681
186,928,681
186,928,681
186,928,681
186,928,681
186,928,681
186,928,681
% of Units in Issue
12.7
14.8
27.5
27.5
27.5
27.5
27.5
27.5
27.5
Notes:
Frasers Centrepoint Asset Management (Commercial) Ltd. (“FCAMC”) is deemed to be interested in the 863,924 Units in
FCOT which are held directly by its wholly-owned subsidiary, Frasers Centrepoint Property Management (Commercial)
Pte. Ltd. (“FCPMC”).
(1)
Frasers Centrepoint Limited (“FCL”) holds a 100% direct interest in each of FCAMC and FCL Trust Holdings (Commercial)
Pte. Ltd (“FCLTC”). FCAMC and FCLTC hold Units in FCOT and FCAMC is deemed interested in the Units in FCOT held by
FCPMC. FCL therefore has a deemed interest in the Units in FCOT in which each of FCAMC and FCLTC has an interest,
by virtue of Section 4 of the Securities and Futures Act (Chapter 289) of Singapore (“SFA”).
(2)
Thai Beverage Public Company Limited (“ThaiBev”) holds a 100% interest in International Beverage Holdings Limited (“IBHL”);
(3)
–
–
–
–
–
IBHL holds a 100% direct interest in InterBev Investment Limited (“IBIL”);
IBIL holds a greater than 20% interest in FCL;
FCL holds a 100% direct interest in each of FCAMC and FCLTC;
FCAMC holds a 100% direct interest in FCPMC; and
FCAMC, FCLTC and FCPMC hold Units in FCOT.
ThaiBev therefore has a deemed interest in the Units in FCOT in which FCL has an interest, by virtue of Section 4 of the SFA.
IBHL holds a 100% direct interest in InterBev Investment Limited (“IBIL”);
(4)
–
–
–
–
IBHL therefore has a deemed interest in the Units in FCOT in which FCL has an interest, by virtue of Section 4 of the SFA.
(5)
– FCL holds a 100% direct interest in each of FCAMC and FCLTC;
– FCAMC holds a 100% direct interest in FCPMC; and
– FCAMC, FCLTC and FCPMC hold Units in FCOT.
IBIL therefore has a deemed interest in the Units in FCOT in which FCL has an interest, by virtue of Section 4 of the SFA.
TCC Assets Limited (“TCCA”) holds a majority interest in FCL;
(6)
– FCL holds a 100% direct interest in each of FCAMC and FCLTC;
– FCAMC holds a 100% direct interest in FCPMC; and
– FCAMC, FCLTC and FCPMC hold Units in FCOT.
TCCA therefore has a deemed interest in the Units in FCOT in which FCL has an interest, by virtue of Section 4 of the SFA.
136
annual
report
2014
U n i tholder s ’
St a t i s t i c s
Charoen Sirivadhanabhakdi and his spouse, Khunying Wanna Sirivadhanabhakdi, each owns 50% of the issued and
paid-up share capital of TCCA;
(7)
–
–
–
–
TCCA holds a majority interest in FCL;
Charoen Sirivadhanabhakdi therefore has a deemed interest in the Units in FCOT in which FCL has an interest, by virtue
of Section 4 of the SFA.
Khunying Wanna Sirivadhanabhakdi and her spouse, Charoen Sirivadhanabhakdi, each owns 50% of the issued and
paid-up share capital of TCCA;
(8)
–
–
–
–
TCCA holds a majority interest in FCL;
Khunying Wanna Sirivadhanabhakdi therefore has a deemed interest in the Units in FCOT in which FCL has an interest,
by virtue of Section 4 of the SFA.
Un ithold ing s of Di rector s of the M a nager
As at 21 October 2014
Directors
1
2
3
4
Dr Chua Yong Hai
Tan Guong Ching
Low Chee Wah
No. of Units
Direct Interest
Deemed interest
142,365
203,379
–
–
142,365
–
200,000
60,000
% of Units in Issue
0.0(1)
0.0(1)
0.0(1)
0.0(1)
Note:
Less than 0.05%
(1)
FREE FLOAT
Based on information available to the Manager as at 28 November 2014, approximately 72.5% of the Units are held in the
hands of the public. Rule 723 of the Listing Manual of the SGX-ST has accordingly been complied with.
137
Frasers
Commercial
Trust
I n tere s ted
P er s o n
T r a n s a ct i o n s
The transactions entered into with interested persons during the financial year which fall within the Listing Manual of the
Singapore Exchange Securities Trading Limited (“SGX-ST”) and the Property Funds Appendix of the Code on Collective
Investment Schemes (excluding transactions of less than $100,000 each) are as follows:
Aggregate value of all Interested
Person Transactions during the
financial year under review
(excluding transactions of less
than $100,000 each)
$’000
Names of Interested Persons
Frasers Centrepoint Asset Management (Commercial) Ltd
– Management fees paid and payable1
(11,880)
Frasers Centrepoint Property Management (Commercial) Pte Ltd
– Property management fees paid and payable2
– Leasing commission and other expenses
(1,814)
(1,152)
Orrick Investments Pte Ltd (“Orrick”)
– Rental income from Alexandra Technopark3
– Reimbursement of expenses paid on behalf of Orrick Investments Pte Ltd
– Reimbursement of expenses paid on behalf of the Trust
19,812
124
(106)
British and Malayan Trustees Limited
– Trustee fees
(554)
Please also refer to Note 23 ‘Significant related party transactions’ in the financial statements.
Management fees payable to Frasers Centrepoint Asset Management (Commercial) Ltd and Frasers Centrepoint Property
Management (Commercial) Ltd on the basis of, and in accordance with the terms and conditions set out in the Trust Deed
dated 12 September 2005 (as amended) and/or the prospectus dated 23 March 2006 are not subject to Rules 905 and 906
of the SGX-ST’s Listing Manual. Accordingly, such fees are not subject to aggregation and other requirements under Rules
905 and 906 of the SGX-ST’s Listing Manual.
Except as disclosed above, there were no other interested person transactions (excluding transactions of less than $100,000
each) entered into during the financial year under review nor any material contracts entered into by the Trust that involved the
interests of the Chief Executive Officer, any Director or any controlling Unitholder of the Trust.
Notes
A summary of Ordinary Units issued for part payment of the management fees to Frasers Centrepoint Asset Management
(Commercial) Ltd in respect of the financial year is as follows:
1
Relevant Period
1 October 2013 to 31 December 2013
1 January 2014 to 31 March 2014
1 April 2014 to 30 June 2014
Issue date
Ordinary Units issued
Value
$’000
24 January 2014
25 April 2014
23 July 2014
586,569
694,880
883,707
736
869
1,194
The issue prices of the Ordinary Units issued were determined based on the volume weighted average price of the
Ordinary Unit for the last ten business days preceding the end of the relevant periods.
During the financial year ended 30 September 2014, property management fees were paid and payable in the form
of cash to the Property Manager, Frasers Centrepoint Property Management (Commercial) which amounted to
approximately $1,814,000.
A master lease agreement was entered into between British and Malayan Trustees Limited, in its capacity as trustee of
FCOT and Orrick, pursuant to which the Trustee granted a master lease to Orrick in respect of Alexandra Technopark for
a period of five years from 26 August 2009 at a fixed net rental of S$22.0 million per annum. The master lease expired on
25 August 2014 and the rental received under the master lease agreement for the financial year amounted to $19,812,000.
2
3
138
annual
report
2014
N O T I C E
O F
ANN U A L
G E N E R A L
M E E T IN G
NOTICE IS HEREBY GIVEN that the 6th Annual General Meeting of FRASERS COMMERCIAL TRUST (“FCOT”, and an annual
general meeting of FCOT, “AGM”) will be held at Level 2, Alexandra Point, 438 Alexandra Road, Singapore 119958 on
Thursday, 22 January 2015 at 10.00 a.m. for the following purposes:(A ) R OU T IN E B U SIN E SS
Resolution (1)
1.
To receive and adopt the Report of the Trustee of FCOT issued by British and Malayan Trustees Limited,
the trustee of FCOT (the “Trustee”), the Statement by the Manager issued by Frasers Centrepoint Asset
Management (Commercial) Ltd., the manager of FCOT (the “Manager”) and the Audited Financial Statements
of FCOT for the financial year ended 30 September 2014.
Resolution (2)
2.
To re-appoint Ernst & Young LLP as Auditors of FCOT to hold office until the conclusion of the next AGM, and
to authorise the Manager to fix their remuneration.
(B) S P E C IAL B U SIN E SS
To consider and, if thought fit, to pass the following Ordinary Resolutions, with or without any modifications:
Resolution (3)
3. That authority be and is hereby given to the Manager, to:
(a)
(i)
issue units in FCOT (“Units”) whether by way of rights, bonus or otherwise; and/or
(ii)
make or grant offers, agreements or options (collectively, “Instruments”) that might or would
require Units to be issued, including but not limited to the creation and issue of (as well as
adjustments to) securities, warrants, debentures or other instruments convertible into Units,
at any time and upon such terms and conditions and for such purposes and to such persons as the
Manager may in its absolute discretion deem fit; and
(b)
issue Units in pursuance of any Instrument made or granted by the Manager while this Resolution
was in force (notwithstanding that the authority conferred by this Resolution may have ceased to be
in force),
provided that:
(1)
the aggregate number of Units to be issued pursuant to this Resolution (including Units to be issued
in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed fifty per
cent (50%) of the total number of issued Units (excluding treasury Units, if any) (as calculated in
accordance with sub-paragraph (2) below), of which the aggregate number of Units to be issued other
than on a pro rata basis to Unitholders of FCOT (“Unitholders”) does not exceed twenty per cent (20%)
of the total number of issued Units (excluding treasury Units, if any) (as calculated in accordance with
sub-paragraph (2) below);
139
Frasers
Commercial
Trust
N O T I C E
(2)
O F
ANN U A L
G E N E R A L
M E E T IN G
subject to such manner of calculation as may be prescribed by Singapore Exchange Securities Trading
Limited (the “SGX-ST”) for the purpose of determining the aggregate number of Units that may be
issued under subparagraph (1) above, the total number of issued Units (excluding treasury Units, if
any) shall be based on the number of issued Units (excluding treasury Units, if any) at the time this
Resolution is passed, after adjusting for:
(a)
any new Units arising from the conversion or exercise of any Instruments which are outstanding
at the time this Resolution is passed; and
(b) any subsequent bonus issue, consolidation or subdivision of Units;
(3) in exercising the authority conferred by this Resolution, the Manager shall comply with the provisions
of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been
waived by the SGX-ST) and the trust deed constituting FCOT (as amended and restated) (the “Trust
Deed”) for the time being in force (unless otherwise exempted or waived by the Monetary Authority of
Singapore);
(4)
unless revoked or varied by Unitholders in a general meeting, the authority conferred by this
Resolution shall continue in force until (i) the conclusion of the next AGM or (ii) the date by which the
next AGM is required by the applicable law or regulations to be held, whichever is earlier;
(5)
where the terms of the issue of the Instruments provide for adjustment to the number of Instruments
or Units into which the Instruments may be converted in the event of rights, bonus or other
capitalisation issues or any other events, the Manager may issue additional Instruments or Units
pursuant to such adjustment notwithstanding that the authority conferred by this Resolution may
have ceased to be in force at the time the Instruments or Units are issued; and
(6) the Manager, any director of the Manager (“Director”) and the Trustee, be and are hereby severally
authorised to complete and do all such acts and things (including executing all such documents as may
be required) as the Manager, such Director or, as the case may be, the Trustee may consider expedient
or necessary or in the interest of FCOT to give effect to the authority conferred by this Resolution.
(Please see the Explanatory Note)
(C) OT HE R B U SIN E SS
4.
To transact any other business which may properly be brought forward.
(Company Registration No: 200503404G)
as manager of Frasers Commercial Trust
Piya Treruangrachada
Company Secretary
Singapore
23 December 2014
140
annual
report
2014
N O T I C E
O F
ANN U A L
G E N E R A L
M E E T IN G
Notes:
(1)
A Unitholder entitled to attend the meeting and vote is entitled to appoint not more than two proxies to attend and vote
in his/her stead. A proxy need not be a Unitholder.
Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he/she specifies the
proportion of his/her holding (expressed as a percentage of the whole) to be represented by each proxy.
(2)
The instrument appointing a proxy or proxies (a form is enclosed) must be deposited with the company secretary of the
Manager at the registered office of the Manager at 438 Alexandra Road, #21-00 Alexandra Point, Singapore 119958, not
less than 48 hours before the time appointed for holding the meeting.
(3)
EXPLANATORY NOTE:
Resolution 3
Resolution 3 above, if passed, will empower the Manager from the date of this AGM until the date of the next AGM, to issue
Units and to make or grant instruments (such as securities, warrants or debentures) convertible into Units and issue Units
pursuant to such instruments, up to a number not exceeding 50% of the total number of issued Units (excluding treasury
Units, if any), of which up to 20% may be issued other than on a pro rata basis to Unitholders.
For determining the aggregate number of Units that may be issued, the percentage of issued Units will be calculated based
on the issued Units at the time Resolution 3 above is passed, after adjusting for new Units arising from the conversion or
exercise of any Instruments which are outstanding at the time Resolution 3 above is passed and any subsequent bonus
issue, consolidation or subdivision of Units.
Fund raising by issuance of new Units may be required in instances of property acquisitions or debt repayments. In any
event, if the approval of Unitholders is required under the Listing Manual of the SGX-ST and the Trust Deed or any applicable
laws and regulations in such instances, the Manager will then obtain the approval of Unitholders accordingly.
PERSONAL DATA PRIVACY:
By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or
any adjournment thereof, a Unitholder (i) consents to the collection, use and disclosure of the Unitholder’s personal data by
the Manager (or its agents) for the purpose of the processing and administration by the Manager (or its agents) of proxies
and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the
attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for
the Manager (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively,
the “Purposes”) and (ii) warrants that where the Unitholder discloses the personal data of the Unitholder’s proxy(ies) and/
or representative(s) to the Manager (or its agents), the Unitholder has obtained the prior consent of such proxy(ies) and/or
representative(s) for the collection, use and disclosure by the Manager (or its agents) of the personal data of such proxy(ies)
and/or representative(s) for the Purposes.
IMPORTANT NOTICE
The value of Units and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or
guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the
possible loss of the principal amount invested.
Investors should note that they have no right to request the Manager to redeem or purchase their Units for so long as the
Units are listed on the SGX-ST. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST.
The listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
The past performance of FCOT is not necessarily indicative of the future performance of FCOT.
141
This page is intentionally left blank.
F R AS E R S C O M M E R C IA L T R U S T
(Constituted in the Republic of Singapore
pursuant to a trust deed dated 12 September 2005
(as amended and restated))
PROXY FOR M
ANNU A L G E N E R A L M E E TING
I/We
IMPORTANT
1. For investors who have used their CPF money to buy units in Frasers
Commercial Trust, this Annual Report is forwarded to them at the request
of their CPF Approved Nominees and is sent FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective
for all intents and purposes if used, or purported to be used, by them.
3. CPF Investors who wish to attend the Annual General Meeting as
OBSERVERS have to submit their requests through their respective Agent
Banks so that their Agent Banks may register, in the required format,
with the Company Secretary of Frasers Centrepoint Asset Management
(Commercial) Ltd. (Agent Banks: please see note No. 8 on required format).
Personal Data Privacy
By submitting an instrument appointing a proxy(ies) and/or representative(s),
the Unitholder accepts and agrees to the personal data privacy terms set out in
the Notice of Annual General Meeting dated 23 December 2014.
(Name) (NRIC/Passport Number)
of
(Address)
being a unitholder/unitholders of Frasers Commercial Trust (“FCOT”), hereby appoint:
Name
Address
NRIC/Passport
Number
Proportion of Unitholdings (Note 2)
NRIC/Passport
Number
Proportion of Unitholdings (Note 2)
No. of Units
%
and/or (delete as appropriate)
Address
No. of Units
%
or, failing him/them, the Chairman of the Annual General Meeting as my/our proxy/proxies to attend and to vote for me/
us on my/our behalf and if necessary, to demand a poll, at the Annual General Meeting of FCOT to be held at 10.00 a.m.
on Thursday, 22 January 2015, at Level 2, Alexandra Point, 438 Alexandra Road, Singapore 119958, and any adjournment
thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the Annual General
Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from
voting at his/their discretion, as he/they may on any other matter arising at the Annual General Meeting.
Note: The Chairman of the Annual General Meeting will be exercising his right under paragraph 6(e) of Schedule 1 of
the trust deed dated 12 September 2005 constituting FCOT (as amended and restated) to demand a poll in respect of
the resolutions to be put to the vote of unitholders at the Annual General Meeting and at any adjournment thereof.
Accordingly, such resolutions at the Annual General Meeting will be voted on by way of poll.
NO.
1.
2.
3.
4.
RESOLUTIONS RELATING TO:
ROUTINE BUSINESS
To receive and adopt the Trustee’s Report, the Statement by the Manager and the
Audited Financial Statements of FCOT for the financial year ended 30 September 2014
To re-appoint Ernst & Young as Auditors of FCOT and authorise the Manager to fix
their remuneration
SPECIAL BUSINESS
To authorise the Manager to issue Units and to make or grant convertible
instruments (Ordinary Resolution)
OTHER BUSINESS
To transact any other business which may properly be brought forward
No. of Votes No. of Votes
For*
Against*
* If you wish to exercise all your votes “For” or “Against” the relevant resolution, please tick ( ) within the relevant box
provided. Alternatively, if you wish to exercise your votes for both “For” and “Against” the relevant resolution, please
indicate the number of Units in the boxes provided.
Dated this
day of
Signature(s) of Unitholder(s)/Common Seal
IMPORTANT: PLEASE READ NOTES TO THE PROXY FORM
2015
Total number of Units held (Note 4)
Apply glue here
Apply glue here
Name
fold here Do not staple. Glue all sides firmly.
IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW
Notes To Proxy Form
1. A unitholder of FCOT (“Unitholder”) entitled to attend and vote at the meeting is entitled to appoint one or two proxies to attend and
vote instead of the Unitholder. A proxy need not be a Unitholder. The instrument appointing a proxy or proxies must be deposited with
the Company Secretary of the Manager at its registered office at 438 Alexandra Road, #21-00 Alexandra Point, Singapore 119958, not
less than 48 hours before the time appointed for holding the meeting.
2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless the Unitholder specifies the proportion
of the Unitholder’s holding (expressed as a percentage of the whole) to be represented by each proxy.
3. Completion and return of this instrument appointing a proxy or proxies shall not preclude a Unitholder from attending and voting at
the meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a Unitholder attends the meeting in person, and
in such event, the Manager reserves the right to refuse to admit any person or persons appointed under this instrument of proxy, to
the meeting.
4. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against the Unitholder’s name in
the Depository Register maintained by the Central Depository (Pte) Limited (“CDP”), he should insert that number of Units. If the
Unitholder has Units registered in the Unitholder’s name in the Register of Unitholders of FCOT, the Unitholder should insert that
number of Units. If the Unitholder has Units entered against the Unitholder’s name in the said Depository Register and registered in
the Unitholder’s name in the Register of Unitholders, the Unitholder should insert the aggregate number of Units. If no number is
inserted, this form of proxy will be deemed to relate to all the Units held by the Unitholder.
5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing.
Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal
or under the hand of its attorney or a duly authorised officer.
6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the power of attorney or a duly
certified copy thereof must (failing previous registration with the Manager) be lodged with the instrument of proxy, failing which the
instrument may be treated as invalid.
7. The Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the true
intentions of the appointor are not ascertainable from the instructions of the appointor specified on and/or attached to the Proxy
Form. In addition, in the case of Units entered in the Depository Register, the Manager may reject a Proxy Form if the Unitholder,
being the appointor, is not shown to have Units entered against the Unitholder’s name in the Depository Register as at 48 hours
before the time appointed for holding the meeting, as certified by CDP to the Manager.
8. Agent Banks (as defined below) acting on the request of CPF investors who wish to attend the meeting as Observers are required to
submit in writing, a list with details of the investors’ names, NRIC/Passport numbers, addresses and numbers of Units held. The list,
signed by an authorised signatory of the Agent Bank, should reach the Company Secretary, at the registered office of the Manager not
later than 48 hours before the time appointed for holding the meeting. “Agent Banks” are banks appointed to maintain Unitholders’
CPF Investment Accounts under the CPF Investment Scheme-Ordinary Account.
fold here
Postage will be
paid by
addressee. For
posting in
Singapore only.
BUSINESS REPLY SERVICE
PERMIT NO. 09047
The Company Secretary
(as manager of Frasers Commercial Trust)
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
C o r p o r at e
i n f o r m at i o n
MANAGER
SGX S h o rt Trad ing Name
TRUSTEE
Frasers Centrepoint Asset
Management (Commercial) Ltd.
438 Alexandra Road
Singapore 119958
Phone: +65 6276 4882
Fax: +65 6276 8942
Email: fcot@fraserscentrepoint.com
Website: www.fraserscommercialtrust.com
Frasers Com Tr
British and Malayan Trustees
Limited
1 Coleman Street #08-01
The Adelphi
Singapore 179803
Phone: +65 6535 4922
Fax: +65 6535 1258
Dir e cto r s o f th e M a n ag e r
Dr Chua Yong Hai
Chairman & Independent
Non-Executive Director
Mr Low Chee Wah
Chief Executive Officer &
Executive Director
Mr Chay Wai Chuen
Independent Non-Executive Director
Mr Chia Khong Shoong
Mr Lim Ee Seng
Mr Tan Guong Ching
Independent Non-Executive Director
Mr Christopher Tang Kok Kai
Au d it , r isk an d c o m p li a n c e
Co mm it T e E
Mr Chay Wai Chuen (Chairman)
Dr Chua Yong Hai
Mr Tan Guong Ching
Mr Christopher Tang Kok Kai
Co m pany S e c re ta r y o f th e
manag e r
Mr Piya Treruangrachada
B a n ke rs
Australia and New Zealand
Banking Group Limited
10 Collyer Quay #30-00
Ocean Financial Centre
Singapore 049315
Phone: +65 6681 8033
Website: www.anz.com
BNP Paribas Singapore Branch
10 Collyer Quay #34-01
Ocean Financial Centre
Singapore 049315
Phone: +65 6210 1288
Website: www.bnpparibas.com
Commonwealth Bank of Australia,
Singapore Branch
1 Temasek Avenue,
#17-01 Millenia Tower
Singapore 039192
Phone: +65 6349 7000
Website: www.commbank.com.au
DBS Bank Limited
12 Marina Boulevard,
Marina Bay Financial Centre
Tower 3 Level 46
Singapore 018982
Phone: +65 6222 2200
Website: www.dbs.com
Malayan Banking Berhad
2 Battery Road
21st Floor, Maybank Tower
Singapore 049907
Phone: 6535 2266
Website: www.maybank.com
Oversea-Chinese Banking
Corporation Limited
63 Chulia Street #03-05
OCBC Centre East
Singapore 049514
Phone: +65 6538 1111
Website: www.ocbc.com
Unit Re g istrar and Unit
Transfe r Office
Boardroom Corporate & Advisory
Services Pte Ltd
50 Raffles Place #32-01
Singapore Land Tower
Singapore 048623
Phone: +65 6536 5355
Fax: +65 6536 1360
Aud ito r
Ernst & Young LLP
One Raffles Quay
North Tower, Level 18
Singapore 048583
Phone: +65 6535 7777
Fax: +65 6532 7662
Partner-in-charge: Nagaraj Sivaram
Appointed: Financial year 2011
Managed by:
Fr asers Centrepoint Asset Management (Commercial) Ltd.
Company Registration Number: 200503404G
438 Alexandra Road
Singapore 119958
Phone: +65 6276 4882
Fax: +65 6276 8942
w w w.fraserscommercialtrust.com

growth - Frasers Commercial Trust

Transcription

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