19-03-2015, 04:25 PM
zerobeta, thanks for digging into the suggestions.
CMT has the same profile as FCT of having mostly well located suburban malls though the proportion is less. They use the same thesis of catering more to spending on captive necessities than discretionaries. So it's dpu doing well during crises (even SARS 2003) is supportive of the thesis.
FCT's dpu for FY07, 08, 09, 10 is 6.55, 7.29, 7.51, 8.08 cents respectively. So it not only survived the GFC of 08/09 but it's dpu actually grew during the crisis in spite of parts of Northpoint being shut down for AEI then. So call it what you want - confirmation bias, low gearing, etc - the results speak for itself.
It is not disputed that the malls are not protected from external or economic factors, especially the ones not adjacent to MRT stations like Bedok Point or Anchorpoint. Management have said sometimes they needed to reposition some of the malls and involves some down time as they switch tenants. Fortunately the contribution of the more vulnerable malls to NPI is very small. As for the sell side analysts, do take what they say with a pinch of salt...
There was an audio conference with analysts after last quarter's results. I listened in and learned that "transitional vacancy" refers mostly to space that was vacant during the reporting period but has already been committed to ie has been taken up.
Do note that some of CMT's malls also do have vacancy drops eg. IMM during repositioning (2014 - 96%), Funan repositioning (2014 - 98%). This is the same phenomenon as with FCT.
Your original point was the lack of retail experience of the CEO. To be fair to him, he has done very well in spite of his background. And it is not fair to imply that he will be a negative factor to the reit's performance due to this. That there are challenges facing the retail industry this year is a separate point.
Which you should, that's what this forum is for...
(19-03-2015, 01:26 PM)zerobeta Wrote:(18-03-2015, 10:03 PM)swakoo Wrote: You're right not to take the rhetorics at face value. However do take a look at how they performed during a crisis eg. GFC of 2008/09 to see how the thesis really bears out.adjusted for rights issues in 1Q2009, Capitamall Trust also has unbroken annual increase in DPU since listing in 2002 and they have malls everywhere in Singapore... so saying FCT could survive crises because of their defensive suburban malls can be misleading (confirmation bias)... FCT could survive for different reason, perhaps low gearing?
CMT has the same profile as FCT of having mostly well located suburban malls though the proportion is less. They use the same thesis of catering more to spending on captive necessities than discretionaries. So it's dpu doing well during crises (even SARS 2003) is supportive of the thesis.
FCT's dpu for FY07, 08, 09, 10 is 6.55, 7.29, 7.51, 8.08 cents respectively. So it not only survived the GFC of 08/09 but it's dpu actually grew during the crisis in spite of parts of Northpoint being shut down for AEI then. So call it what you want - confirmation bias, low gearing, etc - the results speak for itself.
Quote:(18-03-2015, 10:03 PM)swakoo Wrote: Do check if the drop is temporary and due to repositioning, AEI, etc or prolonged. Also check what % these malls contribute to total NPI.of course I have checked... the drop was temporary, i.e. 2 quarters for Bedok point and 1-3 quarters for others, but as I've said, even temporary can be painful because REITs pay dividend every quarters... in regards to % contribution to NOI, it could be small or it could be huge, it doesn't matter because my point here is to show that their occupancy rate is in fact not protected from external or economics factors, as opposed to what the management has long claimed.... a lot of sell side analysts have also pointed out about the defensive nature of their properties too which show how misleading the investors can be led to believe...
It is not disputed that the malls are not protected from external or economic factors, especially the ones not adjacent to MRT stations like Bedok Point or Anchorpoint. Management have said sometimes they needed to reposition some of the malls and involves some down time as they switch tenants. Fortunately the contribution of the more vulnerable malls to NPI is very small. As for the sell side analysts, do take what they say with a pinch of salt...
Quote:(18-03-2015, 10:03 PM)swakoo Wrote: Do write to the IR manager for a clarification. Do not assume. The definition can matter.I was gonna ask this to the IR but decided not to do so after learning what happened to bedok point and other properties in the past, i.e. old tenants left, new tenants came in, but took some time because they needed to renovate ("fitting out" as the management put it) or as in the case of YewTee Point, the lease expired and the management was in process of "evaluating prospective tenants"....
so "transitional vacancy" can mean any of these things which means the definition doesn't matter because it clearly shows some of their shops in fact aren't stable and can be vacant for some time, and again, this is despite the claim that their shops are defensive in nature (the definition only matters when it's related to something non recurring such as accidents) also if you compare with Capitamall Trust and Mapleetree Trust, their occupancy rate is often close to 100% (except during AEI), and much much more stable than the "resilient-suburban" malls of FCT...
you can check historical occupancy rate of Capitamall Trust in this link (page 30):
http://capitamall.listedcompany.com/news...Slides.pdf
There was an audio conference with analysts after last quarter's results. I listened in and learned that "transitional vacancy" refers mostly to space that was vacant during the reporting period but has already been committed to ie has been taken up.
Do note that some of CMT's malls also do have vacancy drops eg. IMM during repositioning (2014 - 96%), Funan repositioning (2014 - 98%). This is the same phenomenon as with FCT.
Quote:(18-03-2015, 10:03 PM)swakoo Wrote: Do check during his tenure 2010-2015 how did dpu and unit price perform, in spite of his lack of retail experience.Yes, FCT has done very well since he joined, kudos to him and the management team.... but i am more bearish this time because the growth in the past was led by AEI in 3 malls, now only Bedok and Changi City Point that haven't gone through AEI but these are new malls so unlikely there will be any major value-enhancing AEI in the short to medium term... during the period of which Singapore retail isn't also very exciting (as already reflected by flattish rents and falling visitor traffic and occupancy rate) which will only exacerbate the situation...
Your original point was the lack of retail experience of the CEO. To be fair to him, he has done very well in spite of his background. And it is not fair to imply that he will be a negative factor to the reit's performance due to this. That there are challenges facing the retail industry this year is a separate point.
Quote:i'm just playing as a devil's advocate...
Which you should, that's what this forum is for...