Welcome to my investment blog where I share with you my analysis of REITs in Singapore.

I hope that my investment philosophy will bring me a steady stream of income apart from my job. I am aiming for at least $3,000 per month which can sustain the current expenses of myself and my family.

Do enjoy reading my blog and post any comments that you have. I welcome them because it is a time to learn from each other.

When I am looking at investing in REIT, here are some of the guidelines that I am looking at. Feel free to comment on it. I am willing to listen to ideas.

-> at least 8% yield.
-> Price that is lower than its NAV.
-> Low gearing (if possible)
-> High secured NAV.

Current Dividend income is $3,800/month.

Saturday, September 8, 2012

Analysis of FCOT

Current Price on 7th September 2012 = $1.18
  • Current Yield = 5.48% (2012), 7.19% (2013)
  • Price-to-book Ratio = 0.816
  • Assets per unit = $2.978  
  • Debt per unit = $1.532
  • Gearing = 51.4% (not considering CPPU as assets)
  • Secured NAV = $0.387 (34%)
The price of FCOT has risen up to a very important level of $1.18. This is a great milestone because it prompts a relook at its CPPU which has a conversion rate of $1.1845. If the price of its units maintains at around $1.18, I was thinking whether it is better to convert all of its CPPU to ordinary shares which will increase its capital.

Assuming that it is converted to ordinary shares and sale of Keypoint yields $360 million cash, here are the statistics.
  • Current Yield = 5.48% (2012), 7.19% (2013)
  • Price-to-book Ratio = 0.865
  • Assets per unit = $2.42  
  • Debt per unit = $1.056
  • Gearing = 43.6% (including current liabilities)
  • Secured NAV = $0.647 (55%)
Yield will remain the same while its price-to-book ratio will rise to 0.865 which is similar to K-REIT Asia. One good thing about it is that its gearing will drop to 43.6% which might warrant an upgrade in its credit rating. Moreover, its secured NAV will rise to $0.647 which is 55% of its unit price. In any case, gearing will drop when FCOT try to reduce debt.

It seems that FCOT will need to rethink its strategies again since its unit price has gone up by quite a lot. And I suspect that they are already thinking about alternatives.

I am vested with 20,000 shares and will be looking closely at this counter. Have been enjoying the upride of the value of my investment. :-)

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