December 2015 Portfolio Update

Frasers Centrepoint Trust

I have bought Frasers Centrepoint Trust (J69U) @$ 1.825 for 1000 shares. I chose to initiate a position in FCT for the reasons below:

Financials

  1. It pays an attractive dividend yield of 6.29%
  2. Price to book value is at 0.911 (<1)
  3. Net asset value, revenue, DPU has been increasing

Fundamentals

  1. Invest primarily in Singapore’s retail sector, which has been proven defensive in nature
  2. Asset portfolio include 6 suburban malls. Given that the average household income has been increasing, this will benefit FCT’s suburb malls
  3. Interest rates are mostly fixed at an average of 2.5% for debts, interest rate volatility for near term remain low. However, there will be $265 million debt expiring in FY16 (~1/3 of LT debt). This could potentially raise funding cost given Fed’s increase in rates
  4. Growth potential in suburb malls -> increasing trends of big retail brands opening in suburb malls

This is the FIRST REIT (pun not intended) that I have bought to kick start my investment journey. I’m really excited to see what will happen next!

Cheers!

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