Frasers Property (formerly: Frasers Cpt (FCL))

[greengiraffe]

http://www.valuebuddies.com/thread-141-p...#pid119842

Ind prop 7.86% vs AREIT's 6% after costs... so much yield compression hidden within FCL's coveted ALZ purchase.
The real $ lies in FCL not AREIT:

FCL3Q Australand update:


Portfolio valued at S$2.8 billion1
‒Industrial: S$1.5 billion1
‒Office: S$1.3 billion1
Portfolio occupancy (by income) of 95.6%
‒Industrial: 96.2%
‒Office: 94.8%
Portfolio weighted average capitalisation rate of 7.49%
‒Industrial: 7.86%
‒Office: 7.08%
Strong tenant profile
‒51% multinational companies
‒29% ASX listed
‒6% government



The history of the JV with GSIC is as follows:

d) Material joint venture arrangements

The Australand Property Group is party to the Australand Logistics Joint Venture (ALJV) with the Government of

Singapore Investment Corporation. The ALJV holds industrial properties and as at 31 December 2013 had assets
of $375 million. The Australand Property Group holds a 19.9% interest in the ALJV.

The ALJV arrangements and ART Agreement include change of control provisions that may be triggered as a

consequence of the Offer. If the Offer becomes unconditional and the Bidder and its Associates become the

holder of more than 50% of all Australand Securities, that will constitute a change of control for this purpose. If a

change of control occurs without the consent of the co-venturer, the co-venturer may:
(i) in respect of the ALJV:

 buy-out (or elect that its nominee will buy-out) the Australand Property Group’s interest in the

joint venture for market value (less transaction costs); or
 require an orderly wind down of the joint venture; and

So The JV was formed between ALZ and GSIC during the Capland ownership days and FCL owns 19.9% of the JV with a last reported assets worth $375m that has been transacted at around $1bn... 

I think the $375m should likely be a net of debt figure and hence the impact on FCL's bottomline is a lot less.

Anyway, A REITs purchase serves to remind many that FCL's purchase of ALZ has a lot of hidden potential and will sustain FCL's growth path amidst a highly challenging domestic mkt for a long time coming...