Tuesday, April 16, 2024

Added Frasers Centrepoint Trust

I deployed my war chest into Frasers Centrepoint Trust (FCT) today.

My order of 4,000 shares of FCT at $2.12 was filled this afternoon to increase my stake to 12,000 shares.

In Feb 2024, Frasers Centrepoint Trust (FCT) has issued 71.4m shares at $2.18 from private placement to raise funds of $200m to partially fund a 24.5% stake in Nex by acquiring from its sponsor, Frasers Property. 

This was a strong diversification and consolidation move to cement FCT's position as heartland mall king in Singapore. After the acquisition, FCT effectively owns 50% stake of NEX and is now the only pure local retail mall Reit in Singapore. I hope and believe that FCT will eventually acquire Nex fully to also give shareholders an opportunity to participate in equity fund raising again.

FCT has always been in my watchlist to grow my SGX income portfolio. It will be announcing its results and the remaining dividends (I am expecting 1.5 cents or more) of 1H FY24 on 25 Apr 2024. It has paid out 4.25 cents earlier due to book balancing from additional shares arising from the private placement.

My recent visits to Northpoint City and Tiong Bahru Plaza owned by FCT have been encouraged by great retail crowd, strong retail sales, high tenancy and more efficient usage of atrium spaces for sales events.

At $2.12, FCT is trading at 8% below its net asset value of $2.32 and yielding more than 5.5%. This is a price which is lower than what institutional investors paid for during private placement hence I am comfortable with the margin of safety.

I believe it is a no brainer to add FCT for long-term investment albeit the short-term volatility due to immense fears and noises over recession and high interest rates.

Thanks for reading.

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With love & peace,

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