Frasers Property (formerly: Frasers Cpt (FCL))

[cyclone]

Central Park Retail assets sold

* $2 billion Central Park community nears completion
* Frasers Property Australia and Sekisui House Australia sell retail assets
* Fortius Funds Management and SC Capital Partners Group acquire high profile Sydney CBD destination shopping centres
* The combined three retail assets sold for A$174.5 million

Frasers Property Australia and Sekisui House Australia, the joint venture partners behind the award-winning A$2 billion Central Park in Sydney CBD, have sold and settled the three final retail assets in the mixed-use community to a consortium comprising Fortius Funds Management and SC Capital Partners Group on behalf of its RECAP V Fund, for A$174.5 million.

Located in the heart of one of Sydney’s most vibrant and dynamic precincts, Central Park Retail comprises three freehold retail assets – Central Park Mall, DUO Retail and Park Lane Retail – with a total combined GLA of 14,600 sqm.

Central Park Mall, the largest of the three assets, opened in late 2013 and is anchored by a high performing Woolworths supermarket and state-of-the-art Palace Central cinema complex. It houses a diverse mix of entertainment, fashion and experiential retailers, complemented by a world-class alfresco dining precinct. It’s also the centrepiece of a community that has redefined urban living in the CBD. Internationally acclaimed for its vertical gardens and heliostat, the Central Park development has transformed a former brewery site into a vibrant mixed-use precinct with retail, commercial, hotel, education, student accommodation and residential uses integrated with a thriving entertainment and lifestyle offer.

More details in https://links.sgx.com/FileOpen/FPL_Annou...eID=581349

[cyclone]

Frasers Property Limited registers S$1,293 million PBIT in FY19
* Investment properties provided stable earnings base and partially offset effects of lumpy development income
* Enhanced key platforms, including the Group’s retail platform with the acquisition of an ~88% stake in PGIM Asia Retail Fund and the formation of an integrated multi-national industrial and logistics platform, while further scaling up the Thailand country platform with the increase in holdings in Golden Land.



The Directors propose, subject to shareholders’ approval, a final dividend of 3.6 cents (2018: 6.2 cents) per share, to be paid on 18 February 2020. Taken with the interim dividend of 2.4 cents (2018: 2.4 cents) per share already paid, this will give a total distribution for the year of 6.0 cents (2018: 8.6 cents) per share.

More details in :
1. https://links.sgx.com/FileOpen/FPL_FY201...eID=586403
2. https://links.sgx.com/FileOpen/FPL_FY201...eID=586404
3. https://links.sgx.com/FileOpen/FPL_FY201...eID=586405

[Shiyi]

The company has been paying 8.6 cents annual dividend for the past few years.
Dividend cut this year is a negative for share price.

[Curiousparty]

For big giant like Fraser property, don't expect the share price to move up 100% when the general economy recovers.

Probably can make at most around 30% capital gain (i.e. the low hanging fruits) from the current depressed share price (unlike stock such as iFast, Boustead, etc.)..

Dividends need to be adjusted upwards first for any price recovery. For this to happen, hospitality segment needs to recover..

Need to also keep a close tab on possible signs of "shifting" or re-shuffling of assets around like monopoly (e.g. Lippo), without creating real value for shareholders in the long term..

Also, not sure if the counter may be privatized on the cheap... (e.g. 75% of book NAV which is less than $2!!!!)

CapitaLand is safer because the interest is more aligned with  Singapore ...

[Curiousparty]

FP should be moving soon....Even 2nd tier property counters have started to move. Once dividend is adjusted upwards, which is likely to happen in the next few quarters ahead, counter will be re-rated upwards to $1.5 to $1.6....

So with many REITS and properties under its fold, very easy to do financial reengineering to "create value" for shareholders.

[btws548]

SINGAPORE: Frasers Property on Friday (Sep 9) launched S$420 million worth of five-year green notes that will carry a fixed interest rate of 4.49 per cent per annum. Up to S$300 million will be offered to retail investors in a public offer, while up to S$120 million will be offered to institutional and other investors. The notes will be issued under its wholly owned subsidiary Frasers Property Treasury's S$5 billion multicurrency debt issuance programme, and will be "unconditionally and irrevocably guaranteed" by Frasers Property, said the company. The public offer opened for subscription at 9am on Friday and closes at noon next Wednesday.

Recent FD and SSB rates are around 2-2.6% so is the approx. additional. 2% interest sufficient to cover the additional risk for such an issue? 


https://www.channelnewsasia.com/business...on-2928871

[CY09]

US Fed Risk Free rate is now 2.25%.

Singapore T bills latest bills were priced at 2.875% for retail and institution investors.

If we make the assumption that the interest rates will move in tandem and the expectation that in Sep, Fed will give a 0.75% hike, followed by a Nov 0.50% hike. US fed risk free rate will be 3.50%, while Singapore T bills will be at about 4.10%.

The 0.39% premium seems to be very small.

[weijian]

Since Frasers Property has an earlier ending fiscal year, ie. September. It would be good to check out the "degree of revaluation losses" as it just announced its FY23 results (ending Sept2023) recently.

FY23 (ending Sept2023):
- Investment properties' FV loss = 460mil on starting balance of 24.3bil --> -1.9% loss
- Reason given: Largely attributable to the net fair value losses from the Group’s industrial and logistics assets in Australia, Europe and the UK and commercial assets in the UK.
- US 10 year treasury avg over 1 year (eyeball): ~4%

FY22 (ending Sept2022):
- Investment properties' FV gain = 914mil on starting balance of 24.6bil --> 3.7% gain
- Reason given:  Largely attributable to the net appreciation of the Group’s industrial and logistics assets. Hospitality and commercial properties in Australia and Singapore further contributed to the gain.
- US 10 year treasury avg over 1 year (eyeball): ~2.2%

FY21 (ending Sept2021):
- Investment properties' FV gain = 861mil on starting balance of 21.9bil --> 3.9% gain
- Reason given:  Largely attributable to the net appreciation of the Group’s industrial properties, propelled by strong demand for this asset class.
- US 10 year treasury avg over 1 year (eyeball): ~1.2%

From the simple exercise above, it seems to suggest that risk free rates are a factor but probably not a big one in deciding changes in cap rates/discount. Behaviorally speaking, it is harder to accept losses and so one can imagine the company financiers giving every justification they can have (if they are in a position of strength) to minimize losses. Or another way to explain the "slow revaluation downwards" - Could it be because they were not revalued upwards aggressively in the past?

The old adage can't turn out wrong - You can be sure that all the assets are mostly (always) fully valued. But the same thing can't be said of the liabilities.

[ghchua]

Hi weijian,

Going forward, no doubt that higher borrowing costs and inflationary cost environment will be headwinds for FPL. But is it priced in by the market at 0.3x PB? They have increased their dividend payout this time round and its yield should be an attraction for bargain hunters out there.

[CY09]

St****** in its attempt to nudge minority shareholders to throw in the towel did a 15% revaluation loss for its 4/5 start Australian hotel properties.

Sometimes, its about the intention of the mgmt. There are exception to the rule that all assets are mostly fully valued. Chairman Ow wants investors to give up. Fraser Property group wants to show a financial results as nice as possible to avoid AGM questioning