BUOU dividend yield at 2.3%?

Hi Anthony, I'm not sure what base dividend they used to calculate the forward yield. Usually forward yield is calculated based on analyst's estimate for their future dividend. FLCT's latest DPU is 6.80c and if there is more pressure on interest expense, then we can expect lower DPU which is anyone's guess. So the indicative yield should be still more than 7%.

Hi Rusman - yes, I've searched for news/indication that some fundamental shift has occurred that may lead to to a massive DPU dip, but haven't found anything. Thanks very much for your time and reply. Much appreciated! 

I'm also puzzled by the depressed price for BUOU. The gearing ratio is one of the lowest among the REITS. Plus this REIT is also on STI. Rental reversion seems reasonably good. Any hint/idea where I can find more information to understand the negative sentiment? Thinking of adding since it seems depressed for no good reason. 

Hi Edward,

Generally most REITs in Singapore are trading at low prices and valuation due to expectation of longer and higher interest rate amidst uncertainty on inflation figures. Specifically to FLCT, their financing cost has been going up significantly and eat up their DPU. FY2024 DPU of 6.80c declined by 3.5% as compared to a year ago. FLCT still have loans need to be refinance at higher interest rate, so we can expect more headwinds on DPU. On top of that there is capital distribution (not sustainable as it comes from divestment gain, not recurring rental income) which accounted ~17.6% of the full year DPU. So if you're calculate the yield, I suggest to take these into consideration.

Their positive reversion is a good news but the higher income will only come in progressively over time, so we may see pressure from higher rate on the DPU in the short-term until their cost of debt normalises next year or so. Also note that because a big chunk of their income comes from AUD & EUR, this gives extra uncertainty to investors because of the FX market which tends to be volatile.

You can read from their announcement on SGX below:

https://www.sgx.com/securities/company-announcements?value=FRASERS%20LOGISTICS%20%26%20COMMERCIAL%20ASSET%20MANAGEMENT%20PTE.%20LTD.&type=company

Hi Rusmin, Thanks very much for the insights. You pointed things that I didn't catch. I'm reading the 2024 financial statement again and this time more thoroughly! :) 

Just to add on, in Nov 2024, S&P Global Ratings revised the rating outlook on FLCT  from 'stable' to 'negative'. This fuelled the negative sentiment. https://flct.frasersproperty.com/newsroom/20241114_211046_BUOU_CT7XKU19MA8S83K0.1.pdf

I think the weakness in FLCT is due to lost on Australia Managed Investment Trust status in Australia reference: https://sbr.com.sg/markets-investing/news/loss-mit-status-beyond-control-fht