Overhang over Frasers Commercial Trust's inability to fill gap HP left may recede: analyst

This is if Google is indeed moving into the 400,000 sqft space at Alexandra Technopark.

Fears over Frasers Commercial Trust’s (FCT) inability to fill the space left by HP in December 2018 may recede should Google indeed be moving into an approximate 400,000 sqft space at Alexandra Technopark, according to DBS Equity Research.

A separate report stated that technology giant Google was in advanced talks with FCT to lease the space. Google already occupies an estimated 500,000 sqft as the Mapletree Business City II (MBC II) and is expected to continue expanding its space requirements.

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“If Google does take up the approximate 400,000 sqft of space at Alexandra Technopark, and assuming FCT ha signed up other tenants, Alexandra Technopark will be close to fully occupied,” DBS’ analysts said. “In terms of signing rents, according to a report, Google could be paying $4 psf per month in line with recent signing rents at Alexandra Technopark, as compared to the estimated $6 psf rents at MBC II.”

The analysts added that should Google indeed be moving in, the cloud hanging over FCT will finally be lifted. According to the analysts, FCT’s share price has been depressed over the last few years, trading at around 7% yield.

Following the publication of the report, FCT however clarified in a separate statement that it was in discussions with various prospective tenants and did not confirm Google as one of them.

As of September 2018, the committed occupancy at Alexandra Technopark stood at 70.2%. However, HP vacated a 93,195 sqft space in December 2018, the analysts noted.