Sunday, 20 January 2019

Frasers Commercial Trust (FCOT) Q1FY19 Review and Google in talk with FCOT

Recently there is some news around Google in talk for 400k sq ft in Alexandra Technopark, As I currently I own some share of FCOT, this is a good news for me.

Now, lets look into Q1FY19 result

The overall gross revenue has been on the down trend quarter by quarter from $35m to $31m and the dividend still being supported by
  1. Gain on disposal of hotel development right by $3.7m (Q1FY18 was supported with $1.9m)
    • Total use from this gain to date is around $22.3m out of $44m
  2. 100% Management Fees paid in unit (FY17 and before, portion of the management fees was paid in cash)
HP also did not renew 93k sqft space that expire by 31 Dec 2018 so Q2FY19 will be impacted by this event as well.

Based on the slides on the business park rent for city fringe is around $5.8sq ft so if the deal with Google does happen, then it will be revenue around $2m based on $5.8 calculation.

It will help to reduce the dependency for the dividend to be supported by gain on disposal of hotel development right.

Seem I will need to expect management might plan some acquisition to be able to maintain dpu payout and back to the day where management fee paid in cash instead of unit

The Gearing has went down from 34.7% in previous year to 28.4% this year as a result of the divestment of 55 market street. No major refinancing till FY20 and the current average interest rate is 2.97% and 90% borrowing fixed rate

For the occupancy, it increase from 83.4% to 83.8% compare to the previous quarter. I am expecting positive rental reversion for Singapore properties and negative rental reversion for Australia property plus the weakness in current AUD.

In summary,
  1. DPU will remain flat in the next coming quarter supported by the gain on hotel development
  2.  93k sqft space not renew will drag down the gross revenue in Q2 if item 3 below does not materialised
  3. Deal with Google will off set some dependency on DPU to be supported by the gain on hotel development
  4. Potential growth for DPU will come from China Square central retail podium which will increase from 64k sqft to 78sqft which is currently already 40% pre committed.
  5. Potential acquisition in 2019

Friday, 4 January 2019

Year 2018 Review - The Challenging Year

Year 2018 Review,

Year 2018 is really not a good year for my portfolio which drag by First Reit which drop almost 30% from the high $1.4 in early Jan 18 to the current price less than $1. This was has been my worry but I react too late to reduce my holding, I manage to reduce 47,200 shares before it was start to drop where I was intending to reduce further 50,000.

I have also divested RHT which was my 3rd biggest holding in early 2018 which I glad I did as from the announcement that made so far, it does not seem the manager see the shareholder interest and keep delaying the deal without being able to do anything.

I have added additional $15,000 into my current portfolio which mainly come from the realized gain

My portfolio in term of market value drop about 10%  despite i added $15,000, excluding the injection my portfolio drop about 14%.

I manage to reach realized gain of $32,000 exceeded the target I set last year ($28,000)

Below are my current portfolio

Frasers logistics and Industrial29%
First REIT27%
CapitaLand Retail China Trust13%
Mapletree North Asia Commercial Trust9%
IReit Global8%
EC World4%
Frasers Commercial Trust4%
Apac Reality2%
Fortune REIT2%

I added 2 Non REIT for trying the new approach where while I waiting for capital gain, I will collect the dividend.

For my brick and mortar investment, I am left with around $25,000 to pay the loan which I will complete it by year 2019

There is a new venture for me in 2018 which one of the reason why i only manage to inject $15,000 into stock, This new venture will need few hundred thousand funding and hopefully it will start running latest before Q2 2019.

For Year 2019 Goal,

Based on my long term goal for my stock investment, I am targeting to achieve $31,000 realized gain in 2019 which I think I will achieve if my current holding is performing.

I am monitoring the below REITs to be added into my holding when opportunity arise
1. Mapletree Logistic
2. Frasers Commercial Trust
3. Mapletree North Asia Commercial Trust
4. CapitaRetail China Trust

I will try to add some stock which I think undervalue and paying dividend as well.

Happy New Year 2019 for everyone and hope moving ahead will be smooth sailing for everyone ^_^.

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