I have nothing much to add to my original analysis here. This could probably be a good opportunistic holding from time to time.
FCT just announced their full year 4th quarter results. Majority of the results look well and good. (Slides here)
- DPU was up at 2.98 cents in the 4th quarter. They kept their record of increasing dividends
- Don’t extrapolate and think they will give 2.98 cents base every quarter. Their DPU tends to be staggered. Full year could possibly equate to 11.4 cents next year
- Majority of the assets (Northpoint and Causeway Point have a 12% upwards revision. This is probably linked to the valuation versus how much the land parcel for the integrated bus interchange and town centre in Yishun to be developed
- Because of the increase in asset value, the net debt to asset fell to 25.8%. That looks rather appealing consider substantial amount of debts are fixed. Still valuation cuts both ways. If you think Singapore property prices are a bubble, or discount rate used in valuation is not conservative, a upwards revision in risk free rates will theoretically means future valuation may end downwards
More worrying is how the management struggle to fill up YewTee Point and how they cannot raise the rent for Bedok Point.
Bedok Point is a considerable problem as it is a less favorable location versus Bedok Mall which is a better catchment.
Lower rents versus Bedok Mall may attract some niche operators.
Still Invested. Though substantially less. Could bump up from time to time if I couldn’t find something good.