Dan | Income, Investing & Planning
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Research-driven financial planning content - REITs, income investing, insurance, and retirement planning. Website: www.danconsultancy.com Enquiries: @daniellsx Daniel Lee Shao Xuan Certified Financial Planner (CFPĀ®)
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Updated for FY 2023 and 1Q 2024 performances.
As part of their portfolio rejuvenation program, it is visible that the management had taken the necessary steps to improve their capital management.
That said, it is harder to project or read how their DPU from operations will turn out to be given the impacts of the transition.
As such, for valuation modelling, working with what we have at the moment, I've applied a -10% in DPU to account for the loss of revenue from the properties divested.
More detail are in the report!
Apart from 2008 financial crisis, this is the second time that CapitaLand China Trust had experienced over 60% drawdown since listing.
As a result of the draw down, the dividend yield of CLCT had went from around 5% in 2020 to 9% in 2024.
That said, there are some key considerations that investors might want to pay attention if they want to use this counter as a "yield enhancement" in your REIT portfolio.
More details are in the report!
Updated for FY 2023 performance and Q1 updates.
For valuation, Iāve applied a -10% to distributable income to reflect the worst-case scenario for the ongoing tenant woes over Guangdong Data Centre 1 to 3.
More details are in the report!
Here are the REITS that have reported their earnings or business updates in April 2024:
- CapitaLand Ascott Trust
- CapitaLand China Trust
- CapitaLand India Trust
- CapitaLand Int Com Trust
- CapitaLand Ascendas REIT
- Cromwell European REIT
- CDL Hospitality Trust
- Digital Core REIT
- ESR Logos REIT
- Far East Hospitality Trust
- Frasers Centrepoint Trust
- First REIT
- IREIT Global
- Keppel DC REIT
- Mapletree Pan Asia Commercial Trust
- Mapletree Industrial Trust
- Mapletree Logistic Trust
- OUE Commercial REIT
- Starhill Global REIT
- Sabana Industrial REIT
https://www.danconsultancy.com/post/singapore-reits-business-updates-for-april-2024
PSA: This month's SSB rates is quite solid. Those with spare cash and investible limit can consider parking some funds into it or refinancing your existing SSBs
Updated for FY 2023 performances.
Based on the 1Q 2024 business update, I've updated the valuation model to account for further erosion in DPU as a result of FX losses and higher borrowing cost.
More details are in the report.
A classic case of decent underlying property (almost 100% of rental comes from UK government) but poor management.
While not all hope is lost - given that the operating duration is still too low to draw conclusive insights - I'd personally avoid investing in this counter even though it is trading at double digit dividend yield.
More details are in the report.
PSA: A lot of REITs are testing or have already passed their support levels in the recent days.
Investors who are currently sitting on the sideline should pay attention to the market developments in the coming week and see if there are any good entry points to start a position in the REITs that youāre interested in.
Updated for FY 2023 performances.
As usual, the performance of the REIT has continued to remain remarkable despite the high interest rate environment.
The only complain that I have with the REIT is that the valuation is too pricey to justify starting a position at 4% yield.
More details are in the report.
One of my favourite REIT to have in an income generating REIT portfolio.
CICT is a REIT that holds mainly local retail, offices and integrated development that are of significant quality.
Investors who are investing for a stable income generation should consider looking into CICT to help provide the stability in their dividend income.
More details are in the report.
Daiwa House Logistics Trust is a promising logistic REIT that is predominately focused on Japan logistic properties but is expanding outwards in South East Asia.
While the fundamentals look acceptable, investors will have to price in an "unproven" management given how new the counter is and also the impact of a rising borrowing cost given the interest environment in Japan.
More details are in the report!
Daiwa Logistics is a promising logistic REIT that is predominately focused in Japan logistic properties but are expanding outwards in South East Asia.
While the fundamentals look acceptable, investors will have to price in an "unproven" management given how new the counter is and also the impact of a rising borrowing cost given the interest environment in Japan.
More details are in the report
General Market Updates For Q1
https://www.danconsultancy.com/post/market-updates-2024-quarter-1
In my opinion, Sasseur REIT is a tricky REIT to cover as on one hand, the fundamentals and recovery narrative is attractive enough to start a position, their short underlying land lease is a major concern for me as its potential impact to the NAV when the time comes is currently unknown.
I think investors who are hoping to jump on the China recovery narrative can consider this counter for their underlying exposure but be take special care in terms of their allocation size and pay attention to how the underlying land lease issue will play out in the near future.
More details are in the report!
You can follow my socials for more updates and short form videos on my thoughts and opinions of the REITs that Iāve been covering as well!
Instagram: https://bit.ly/3xb9TP0
TikTok: https://bit.ly/3u7iFOE
The short answer is to avoid this REIT.
Investors looking to invest in China properties can easily find better alternatives listed in the SGX.
More details are in the report
Investors who are unable to stomach the volatility should reconsider investing completely as no instrument will be able to deliver the performance you need if you canāt sit through the ups and downs of the market that comes with ALL financial instruments that have been securitized.
This is especially so in the REIT market where it is absurd for a immovable property that generates steady rental income to experience a 15 to 20% volatility.
To help you understand when you should take action, here's an article that I've done previously on the difference between price action and fundamental developments.
https://www.danconsultancy.com/post/price-action-vs-fundamentals-when-should-you-take-action
Updated for FY2023 results.
Long story short, good REIT but too rich of a valuation to "average down" or start a position.
More details are in the report!
Is there still hope for IREIT Global?
Well, while the numbers does look "okay" at the current price, I personally would avoid investing in it as there are better alternatives providing similar underlying exposure.
That said, for investors who are currently invested in IREIT, it is not all doom and gloom. There is a definitely a room for recovery looking at their current occupancy rate but more patience might be needed due to the economic headwinds in the EU region.
More details are in the report!
Updated for Financial Year 2023 performances.
The results are largely in line with my previous expectations. Apart from the refusal of acquiring seletar mall, nothing much has changed for the REIT.
Investors should pay attention to the cost of debt, which I expect will increase further or at best remain the same moving forward.
More details are in the report!
