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

Question

Billy Ko · Accepted Answer

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.​​​

Bjorn Ng · Answer

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

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For ease of reference:For me, I have a bias preference to Capitaland. I used to be pro-Frasers (in all their REITs actually) because of their prices but I came to the realisation that it's never about the price, it's the underlying business quality (and locations for REITs).

If you noticed, Capitaland malls are mostly nearer to MRT as compared to Frasers. I believe this is due to their link with the government, so in a way they get the "advantage" on the locations. For Frasers, I think one of the better ones is Northpoint.

By at the end of the day, I think it's okay to have a stake in each of them, both are pretty solid!

Choon Yuan Chan · Answer

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​​​