Analysis of Fraser Commercial Trust

Current Price on 26th Jul 2013 = $1.355

• Current Yield = 6.46%  
• Price-to-book Ratio = 0.902
• Assets per unit = $2.726
• Debt per unit = $1.255 (including current liabilities)
• Gearing = 44.9%
• Secured NAV = $0.966 (71.3%)

Fraser Commercial Trust has delivered an excellent results which pushes their yield up to 6.46%, currently the best compared to Keppel REIT, CCT, Suntec REIT etc. Their price-to-book ratio is also at a healthy of 0.902 which means if you buy at this current price, you are getting a 10% discount.

Its redemption of its CPPU units has worked very well for its unitholders because it is one of the main reason why its yield went up. Thus, they have brought down their cost of equity. Secured NAV is also at a healthy 71.3% of its current trading price.

Earlier this year, I went on a strategy to sell off FCOT and buy its CPPU units in hope to convert it to ordinary units. Sad to say, it backfired badly and now I am not able to enjoy the fruits of the growth of this REIT. I sold 6000 shares earlier at $1.10 and still hold on to 22,500 shares of its CPPU units which I hope to sell at $1.10. I doubt I am able to make it because of the decreased interest in the CPPU units. Therefore, I will be applying to convert to ordinary units everytime they send me the document so to prevent it from being redeemed, and just hope that one day I am allowed to do so. If not, I am thinking of selling it and taking it as a lesson learnt.