Friday, 9 February 2018

Frasers Commercial Trust (FCOT) Q1FY18

Q1FY18 Dividend would have been not so good if it is not supported by
  1. Gain on disposal of hotel development rights is pretty high at $1,936 million for Q1 compare to FY17 $3,561 million and FY16 $2,2 million.
  2. Manager fees of $3,369 million is paid in unit 100% compare than Q4FY17 that only $622,000. This basically supply about $2,7 million to the dividend payout $19,456.
The 2 above basically support about $3.8 million to the dividend payout of $19,456 million

As for the recent acquisition the increase of 0.15 cent in dividend was based on 58 million unit issued but the actual unit issued are 67.5 million unit.

For the Alexandra Technopark, I feel the impact of the HPS moving out only just started, I summarized the info below from 3 Nov 17 announcement

HPS occupied 304,920 which the lease expire on 30 Nov however HPS committed to extend the lease in respect of an aggregate of 266,905 sf of space, as follows:
  1. 93,195 sf for thirteen months commencing from 1 December 2017;
  2. 42,561 sf for five months commencing from 1 December 2017; and
  3. 131,149 sf for between two to three months commencing from 1 December 2017;

 For Q1FY18, we only start to feel the impact of losing 38,015 sf and the next one will be pretty big which is the item 3 above, this mean by end February 2018, another 131,149 sf revenue will be lost.

Couple with the lease to be expired in FY18, seem the dividend for FY18 will be ....... as
  1. 100% Manager Fees has been paid out in unit 
  2. Gain on disposal is already pretty high returned to the shareholder 

  1. The manager decided to distribute more to share holder to sustain the dividend. Net proceed was around $44 million and to date they have distributed $7 million
  2. The space not occupied by HPS can be lease out as soon as possible
  3. Positive rental reversion
Another item is the AEI $45 million for Alexandra technopark and the current cash is around $44 million

I don't see how the recent new acquisition can help much on the dividend - Look forward to Q2 result to see how the situation improving.

However, I think the REIT manager is a good one.

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