Fortune Real Estate Investment Trust’s Portfolio In 1 Table

Fortune Real Estate Investment Trust (SGX: F25U) is a REIT that focuses on investing in retail properties in Hong Kong.

The REIT’s stock market performance in the last five years has been excellent, with its stock price up by 110%. This may have captured the attention of investors.

I thus thought it would be useful to take a closer look at Fortune REIT’s business. And since a REIT’s business essentially concerns the properties it owns, I want to better understand Fortune REIT’s properties.

At the end of 2016, the REIT’s portfolio held 17 retail properties in Hong Kong that collectively have nearly 3.2 million square feet of retail area. Here’s a table from the company’s 2016 annual report that gives useful detail about each of the REIT’s 17 properties:

Source: Fortune REIT 2016 annual report

There are a few observations we can draw from the table.

Firstly, the five most important properties for Fortune REIT accounted for 67.9%of the REIT’s total net property income in 2016. This is a high level of concentration. On average, the five aforementioned properties had a strong average occupancy rate of 98.3% at the end of 2016.

Secondly, the average occupancy rate of Fortune REIT’s five most important properties was a strong 98.3% at the end of 2016. This is also higher than the average occupancy rate of 96.7% for the REIT’s overall portfolio.

In sum, we can see that Fortune REIT’s income source is concentrated on only a handful of properties. This would mean that the REIT faces concentration risk. In any case, the REIT also seems to be a good manager of its properties, since it has a high overall occupancy rate of nearly 97%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.