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Heaven and hell for Frasers Commercial Trust?

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As an investment blogger, my goal is always to add value and enhance my members’ investment knowledge. Thus, when a member asked me whether Frasers Centrepoint Trust (FCT) and Frasers Commercial Trust (FCOT) are similar, I have deep concerns. This is because if they cannot get the basic fundamentals right, chances of losing money in the stock market is pretty high.

First and foremost, there is a need to reiterate that investing in a REIT is not the same as investing in stocks, though both are traded in the stock market. Basically, REIT is governed under the Monetary Authority of Singapore’s Collective Investment Scheme, which requires the REIT scheme to have a Manager and Trustee. Typically, many S-REITs also have a Sponsor which owns or develops a portfolio of properties.

Under a REIT’s structure, the Manager, Trustee and Sponsor all have different roles and responsibilities. Initially, the Sponsor will transfer its assets to the portfolio of the REIT and may provide or source for a pipeline of assets to grow the REIT. The trustee is an external party tasked to hold the assets on behalf of the unit holders. The Manager is given the responsibility to execute the strategic direction of the REIT.

Frasers Commercial Trust

Will the real Frasers Commercial Trust please stand up?

Both Frasers Commercial Trust (FCOT) and Frasers Centrepoint Trust (FCT) share the same Sponsor in Frasers Centrepoint Limited (FCL). However, investors must not be confused and should be aware that both REITs are very different entities, with different management teams and investment themes.

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Updated: March 23, 2018 — 6:01 am

2 Comments

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  1. Hi Gerald

    Thanks for your very detailed analysis. I have invested in these shares and have been holding them since IPO. Lately I have been thinking of letting them go but feel a bit sad to release them after holding them for so long. The dividends generated in the past were good but of late like you mentioned not as good. The odds are there. Thanks once again.

  2. Hi Chee Tsing,

    Thank you for your comments. I reckon as investors, we all face the same dilemma.

    Whether to let go or carry on holding is always a challenge. But I do think that business dynamics change all the time and we need to be flexible as well in our strategies. In this regard, it is important to look forward and not look back.

    Regards,
    Gerald
    http://www.sgwealthbuilder.com

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