facebookShould I invest in CapitaMall Trust (SGX: C31) or Frasers Centrepoint Trust (SGX: J69U) as my first REIT? - Seedly
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Anonymous

20 Jan 2020

Should I invest in CapitaMall Trust (SGX: C31) or Frasers Centrepoint Trust (SGX: J69U) as my first REIT?

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    Discussion (3)

    What are your thoughts?

    Billy Ko

    Billy Ko

    25 Mar 2019

    Level 10·Financial Analyst at REPE Firm

    Hey there!

    To analyse REITS, there are a few considerations

    1) Location

    CMT's malls are located more centrally as opposed to FCT's.

    2) Occupancy

    Occupancy level for FCT was approximately 90% whereas CMT's was 99.2%.

    2) Dividend Yield

    -- The main aim of purchasing a REIT. If we were to look at both counters,

    CMT dividend yield of 4.81%

    FCT dividend yield of 5.17%

    Consistency-wise, one can observe that FCT is said to be more consistent in terms of it's dividend payouts. For the past 5 years, its DPS has either remained constant or increased, whereas CMT's dividend fluctuate on a wider variance over the same period of time.

    3) Gearing / Leverage / Debt

    This is important when assessing a REIT as REITS are majority formed up by debt which will largely affect Net Income after paying off loan interests.

    CMT is made up of 35.4% liabilities

    FCT is made up of 31.8% liabilities

    Hence any increase in interest rate is of significant impact towards CMT than FCT.

    Nonetheless, FCT is at its 52 week high whereas CMT is approximately 3% from it's 52 week high. This is not a buy/sell call so please do your additional research should you choose to make an action.‚Äč‚Äč‚Äč

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      Fraser Centrepoint trust is a smaller REIT but its focus is geared towards heartland malls vis a vis Capland Mall REITs which have a higher proportion focused in the orchard belt.

      So if you prefer investing in heartland malls (The mass market kind), fraser centrepoint trust will be the REIT to go to. Personally, I also prefer FCT because it has higher yield and a potential redevelopment gem in its "Causeway Point" which is set to see a larger footfall when Woodlands become an MRT interchange‚Äč‚Äč‚Äč

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        Hey there! I just answered a similar question to this - It seems like it's always a choice between t...

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