Sell @ $1.54
Q118 (Dec-17) Results were released last night. DPU = 2.4ct vs 2.407ct QoQ vs 2.5055ct YoY. A larger Capital component was observed from the DPU breakdown, providing a useful cushion to any DPU decline. NAV = $1.55.
As per my expectation, ATP (Alexandra Techno Park) occupancy dropped to ~80% due to HP lease expiry, impacting NPI significantly.
Altho’ FCOT continues to have the highest Yield amongst it’s asset class, I have decided to continue to sell. DPU will likely continue to decline, till the void left by HP is filled. It’ll likely be cushioned by the new UK acquisition, which is Yield Accretive, plus an increased Capital component. Worst case, we may only see better earnings when the Hotel project and AEI at China Square is completed in mid-19. I’ll be using NAV = $1.55 as a reference to Buy / Sell.