Saturday, 10 August 2019

IREIT Q2FY19 Review

It has been almost a year since I last review IREIT result, I feel Q2 result for IREIT is positive as the manager bring a few positive results which summaries below

Munster South Building,

One of vacant floor since April 2017, finally the manager has manage to lease out with 8.5 years commencing 1 July 201. This will bring additional income and support to maintain current dividend.

Finance Cost

The finance cost has come down due to refinancing at the lower interest rate from 2% to 1.5% which bring additional income to the dividend as stated by the manager

"Income available for distribution increased by 3.3% YoY due mainly to lower finance
expenses post refinancing of borrowings in Feb 2019"


The lease profile has been extended from 4.2 years to 4.6 years with majority lease expire will start from FY2022 which give assurance to me for the dividend for another 2.5 years from now. 


With CDL come into the picture, I am looking forward for IReit to growth their portfolio to diversify their income which currently derived majority from their 2 key tenants.

Key Risk 

Tenant concentration

GMG (52.3%) a key tenant for 3 out of 5 properties and  Deutsche Rentenversicherung Bund (34.2%) a key tenant for Berlin Campus


Currency can be either good or bad for me, this is a natural risk I can't avoid as they operated outside Singapore. 

Tuesday, 23 April 2019

Frasers Commercial Trust (FCOT) Q2FY19 Review

The result is expected as there is no major development in Q219 and dividend is supported by $4.9m gain from the Gain on disposal of hotel development right. With this total of $27.2m out of $44m has been used.

Another bad news is Microsoft Operations Pte Ltd which contribute around 3% FCOT gross rental income has exercise option to per-terminate its lease in Alexandra Technopark and it will end by Jan 2020.

There are 2 AEI in progress
  1. China Square Central that cost $38m
  2. Central Park that cost $11.5m
Those AEI need $$$ which might explain the debt has gone up from previous  610m to 627m.

From the portfolio, filling 40% vacancy space in Alexandra Technopark will not totally help the gap, Total NLA is around 1m sq ft so 40% will be around 400k sq ft and multiply by rent based on slide 35 will just net around $1.5m gross rental.

I am really guessing they will do some acquisition as I don't think the current dividend is sustainable as the management fees already paid 100% in unit and the gain of disposal left around $17m which might only last 3-5 quarters (Note the cash balance is around $20m)

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