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AIMS AMP Capital Industrial REIT and Singapore's 5.8% growth in October exports.

Tuesday, November 16, 2010

Singapore's economy is humming along nicely.  Manufacturing is doing well.


A REIT which I like very much is an industrial properties S-REIT, AIMS AMP Capital Industrial REIT.  With the economy chugging along and exports doing well, this REIT is likely to benefit.

At 10.43AM, there was a single transaction buying up 8,652 lots at 22.5c. That's big money.  At the end of the day, 19,221 lots changed hands making AIMS AMP Capital Industrial REIT the top volume REIT today. 15,090 lots were BUY UPs of which 752 lots were BUY UPs at 23c which is the upper limit of the current trading range and the resistance to watch.

My immediate target for this counter is 26c. How did I arrive at this value? Fundamentally, this would mean a yield of 8% with an annualised DPU of 2.08c for 2011. This, I feel, is fair for a smallish REIT with leasehold industrial real estate in Singapore. Technically, 26c would be the upper limit of the next trading band of 23c to 26c, if we believe that the current trading band is 20c to 23c which has been the case since the counter's CR days.

"Singapore's non-oil domestic exports (NODX) surged a better-than-expected 34.5 per cent from a year earlier, in line with a rebound in shipments out of Asia in October."  Read article here.

2 comments:

Anonymous said...

hi ak

just wondering, why does increased in sg exports lead to better prospect for aims amp reit ?

is it due to the fact that better exports -> industrial companies do well -> expansion by renting more space -> higher demand ?

regards

B

AK71 said...

Hi B,

You got it. REITs must depend on their tenants doing well in order to do well themselves. Higher occupancy, higher rental rates and lower default rates.

Given the circumstances, I believe that this REIT will continue to do well for anyone looking for a reliable high yield investment. :)

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