Frasers CentrePoint Trust

[weijian]

Mercatus bought it 10 years ago for 1.65bil. Based on current valuation (2.08bil), looking at a ((2.08-1.65)/1.65) = 26% capital gain. Over 10 years and accounting for the leverage (lets say 50%) and also 1% nett interest cost on the debt, looking at ~(26/10)*2 - 1% = 4.2% CAGR - The gains are decent but only after leverage though. Mercatus might have overpay then?

Mercatus has a half stake only and the sale is actually at a 21% discount to what it paid in 2012. The current valuation probably includes some debt in it. Whether Mercatus made a gain or loss probably depends on how much income it derived over the 10 years.

https://www.mingtiandi.com/real-estate/r...-for-497m/

Hi swakoo,
I am using the property valuation in 2012 and 2023 to do the difference and normalizing it to percentages, so it can ignore the %stake.

For 2012, I am assuming 1.65bil is the property valuation (independent of debt) and so the 825mil is probably the enterprise value (cash paid + debt)

From the business times article (2023), if we assume all the net working capital (receivables/payables/PPE/taxes etc) to be net 100mil, then we can roughly tabulate the debt:

NAV = property valuation (non current asset) + 100mil (net working capital) - debt (remaining liabilities)
debt =  property valuation (non current asset) - NAV - 100mil = 2.08bil - 1.31bil - 0.1bil =  0.67bil (670mil)