I subscribed to 4,000 Frasers Centrepoint Trust (FCT) preferential offer (PO) shares at $2.05 today.
As I currently own 12,000 FCT shares, my entitled right is 648 FCT PO shares based on the allocation ratio of 54 shares per 1,000 shares owned. My Subscription of 4,000 PO shares include the 648 entitled shares and 3,352 excess shares.
In Mar 2025, Frasers Centrepoint Trust (FCT) has issued 105.3m shares at $2.09 from private placement to institutional investors to raise funds of $220m to partially fund the acquisition of Northpoint City South Wing from North Gem Trust for $1.2b.
This PO exercise for retail investors will raise another $201.3m and the last date/time of acceptance will be on this Wednesday, 16 April 2025 at 5.30pm.
This yield accretive acquisition of Northpoint City South Wing is a strong diversification and consolidation move to cement FCT's position as heartland mall king in Singapore. After the acquisition, FCT effectively owns Northpoint City fully and will still be the only pure local retail mall Reit in Singapore which also owns Causeway Point, 50% of NEX, Century Square, Waterway Point and Tampines One etc. I hope and believe that FCT will eventually also 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 for more dividend income. It will be announcing its results and the dividends of 1H FY25 on 29 Apr 2024, which is expected to be between 6.13 and 6.17 cents.
My recent visits to Northpoint City and Tiong Bahru Plaza owned by FCT have been encouraged by great shopper traffic, strong retail sales, high tenancy and highly efficient usage of atrium spaces for sales events.
FCT is a stable S-Reit which allows investors to own a slice of the suburban malls in Singapore, thereby collecting some “rental income” to offset our daily expenses or fuel our compounding growth of investments.
At current market of $2.13, FCT is trading at 6% below its net asset value of $2.28 and yielding more than 5.5%. As the PO price of $2.05 is still lower than the market price, net asset value and private placement price, I am comfortable with the margin of safety and feel obliged to subscribe to the PO shares including excess, saving up commission and trading fees than if I were to buy from open market.
I believe it is a no brainer to add FCT for long-term investment albeit the short-term volatility due to immense fears and uncertainties over impact from tariff policies, trade war, potential economic recession and interest rates.
Thanks for reading.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.
With love & peace,
Qiongster
4 comments:
What about threat of shoppers next year onwards going via RTS to JB instead (or say, Causeway Point or Northpoint). The savings they get in JB for shopping, F&B and services will be very compelling and for residents in Woodlands (and possibly Sembawang, Chao Chu Kang and Yishun), it may be a no brainer to go slightly further. Esp. if RTS live up to the fast passport-less immigration processing that has been promised.
You raised a critical point on the potential impact of the RTS on Singapore's retail landscape and on FCT. While the RTS improves accessibility to JB malls for cheaper, lower cost options for food and shopping, heartland malls like North point and Causeway point still offer unparalleled convenience for daily needs and spontaneous purchases. There is a good tenant mix such as childcare, tuition service providers which are difficult to be replaced by alternatives from JB. True enough, there might be economic leakage from heartland bargain hunters who are willing to travel across the border for cheaper shopping experience, not everybody will do so and impossible to go JB for shopping everyday. The heartland malls of FCT are strategically linked to MRT stations with huge human traffic catchment and the RTS might even increase their footfall. Besides, Yishun, woodlands and Tampines have new HDB flats which will further increase the population and traffic in these malls. Overall, I believe the impact to FCT malls will be limited. Not everyone take public transport despite the $100k COE and not everybody take economic class flight to avoid high costs of business or suite class. Convenience and experience do largely shape one's choices besides cost.
Any idea when will you know you are allocated the excess allotment that you apply for
Next Fri, 25 Apr before 9am. We can check in CDP portal. For custodian accounts, will take longer for the shares to be credited.
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