Excuse my ignorance, from page 80, it seems that FCL is divesting below the book value of respective properties?
The book value is based on freehold status of the properties. The divestment valuation is based on 75 year lease granted to the REIT on the injection.
GG
(26-05-2014, 10:03 AM)valuebuddies Wrote: [ -> ]Excuse my ignorance, from page 80, it seems that FCL is divesting below the book value of respective properties?
(26-05-2014, 10:40 AM)greengiraffe Wrote: [ -> ]The book value is based on freehold status of the properties. The divestment valuation is based on 75 year lease granted to the REIT on the injection.
GG
(26-05-2014, 10:03 AM)valuebuddies Wrote: [ -> ]Excuse my ignorance, from page 80, it seems that FCL is divesting below the book value of respective properties?
How would FCL accounts the divestment? What I do understand is that FCL remains as the ultimate owner of the land, but not the building. So any land appreciation should be recognised by FCL and not the Reit right? And assuming that the buildings do exist after end of 75 years lease, will FCL took over the ownership of the buildings without having to pay anything? It's is rather a confusing and complicated transaction for me being an outdated accounting graduate.
(26-05-2014, 11:40 AM)valuebuddies Wrote: [ -> ] (26-05-2014, 10:40 AM)greengiraffe Wrote: [ -> ]The book value is based on freehold status of the properties. The divestment valuation is based on 75 year lease granted to the REIT on the injection.
GG
(26-05-2014, 10:03 AM)valuebuddies Wrote: [ -> ]Excuse my ignorance, from page 80, it seems that FCL is divesting below the book value of respective properties?
How would FCL accounts the divestment? What I do understand is that FCL remains as the ultimate owner of the land, but not the building. So any land appreciation should be recognised by FCL and not the Reit right? And assuming that the buildings do exist after end of 75 years lease, will FCL took over the ownership of the buildings without having to pay anything? It's is rather a confusing and complicated transaction for me being an outdated accounting graduate.
Its like Singapore govt and 99 leasehold properties - from public to private.
Anyway, such deals are not deal as most sponsors have been doing such deals - CDL pioneered it with their freehold industrial property at Lor Chuan to Sabana, hospitality reits as well.
(26-05-2014, 11:44 AM)greengiraffe Wrote: [ -> ] (26-05-2014, 11:40 AM)valuebuddies Wrote: [ -> ] (26-05-2014, 10:40 AM)greengiraffe Wrote: [ -> ]The book value is based on freehold status of the properties. The divestment valuation is based on 75 year lease granted to the REIT on the injection.
GG
(26-05-2014, 10:03 AM)valuebuddies Wrote: [ -> ]Excuse my ignorance, from page 80, it seems that FCL is divesting below the book value of respective properties?
How would FCL accounts the divestment? What I do understand is that FCL remains as the ultimate owner of the land, but not the building. So any land appreciation should be recognised by FCL and not the Reit right? And assuming that the buildings do exist after end of 75 years lease, will FCL took over the ownership of the buildings without having to pay anything? It's is rather a confusing and complicated transaction for me being an outdated accounting graduate.
Its like Singapore govt and 99 leasehold properties - from public to private.
Anyway, such deals are not deal as most sponsors have been doing such deals - CDL pioneered it with their freehold industrial property at Lor Chuan to Sabana, hospitality reits as well.
To add-on. The SPH Reits's Paragon was also done with the same approach.
bought FCL at $1.60 and enjoyed the ride, sold off for a nice gain today ^_^
this forum is really a gold mine, thanks for highlighting this wonderful value play
(26-05-2014, 07:01 PM)ValueMaster Wrote: [ -> ]bought FCL at $1.60 and enjoyed the ride, sold off for a nice gain today ^_^
this forum is really a gold mine, thanks for highlighting this wonderful value play
Personally, I felt you left the dinner table a little early. The good dishes have yet to be served. Having said that, it's your money, your call.
(26-05-2014, 07:15 PM)MINX Wrote: [ -> ] (26-05-2014, 07:01 PM)ValueMaster Wrote: [ -> ]bought FCL at $1.60 and enjoyed the ride, sold off for a nice gain today ^_^
this forum is really a gold mine, thanks for highlighting this wonderful value play
Personally, I felt you left the dinner table a little early. The good dishes have yet to be served. Having said that, it's your money, your call.
hi minx, u wont know. maybe he spotted another dinner with better "dishes"
(26-05-2014, 07:15 PM)MINX Wrote: [ -> ] (26-05-2014, 07:01 PM)ValueMaster Wrote: [ -> ]bought FCL at $1.60 and enjoyed the ride, sold off for a nice gain today ^_^
this forum is really a gold mine, thanks for highlighting this wonderful value play
Personally, I felt you left the dinner table a little early. The good dishes have yet to be served. Having said that, it's your money, your call.
Well, I'm just a simple person. If I can make 10% returns a year I would be a very happy man, anything more makes me even happier.
However I'm not a greedy person, just wanted to lock in my 20% gain and relax for a while, hope things continue to go well for you folks, cheers ^^