Slight accretive deal for FCT’s waterway point
$FRASERS CENTREPOINT TRUST(J69U.SI)$$CapLand IntCom T(C38U.SI)$
FCT announced an acquisition of a further 10% stake in Waterway Point, at an agreed property price of S$1,312.5 million, from Sekisui House. The acquisition will bring FCT’s stake in Waterway Point to 50%.
Since the FCT already owns 40% of Waterway Point, the operation data can be easily look up and search. Based on 3Q22, Waterway Point is 100% fully occupied. The 1H22 NPI disclosed for Waterway point is 29.38mil with 77.8% NPI margin. Based on these data, if we assumed Waterway Point can achieved ~60mil of NPI for the next 12 months, this would translate to an entry yield of 4.5%. Not too bad considering Jem was transacted at 4% cap rate by LREIT. FCT has revealed that it will fund the acquisition fully by debt.
With this acquisition, the gearing is estimated to increase from 33.3% to approximately 35%, and it’s very likely FCT will give up on the 5bil Mercatus portfolio. With that, CICT should emerged as the winner for the bid, and Unitholders will have to prepare for possible equity fund raising (there is no way CICT can fund 5bil acquisition using debt alone).
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
A