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OCBC Research: Industrial REITs.

Saturday, February 25, 2012



I came across an interesting piece of research by OCBC on industrial REITs in Singapore and would like to share the salient points here (some of which I have mentioned before in my blog):

Industrial REITs reported healthy 4Q11 results.

Industrial REITs appeared to outperform market expectations.

Expecting stable performance.

Operating metrics still healthy.

Earnings likely to stay resilient.


Percentage of leases due for renewal at comfortable level.


Aggregate leverage may inch upwards after funding potential investments.

Industrial REITs in better financial position now

Maintain OVERWEIGHT view.




I am pleased to see that AIMS AMP Capital Industrial REIT, Sabana REIT, CIT and Cache Logistics Trust have all performed above consensus expectations as I am vested in all four. Bigger names such as Ascendas and Mapletree have only performed within expectations; not vested. (Refer to exhibit 3 in the report.)

See the full report: here.

Related post:
Office S-REITs VS. Industrial S-REITs (3).

8 comments:

Drizzt said...

i see so much cognitive bias in your article there.

meesiam said...

AK71
any 2cents view on commercia investing? This week newspaper is filled with resi as well as commercial new launch.

L

AK71 said...

Hi Drizzt,

I am sure there will always be some element of subjectivity. ;)

AK71 said...

Hi meesiam,

I don't have any experience with commercial properties. I am keeping an eye on new residential property launches as well as GLS. :)

FoodieFC said...

cache logistic doing much better than sabana. Their manager have a much better track record.

AK71 said...

Hi FoodieFC,

A track record takes time to build. Sabana REIT is a new kid on the block and I am willing to give them time. :)

CS said...

Hi AK,
For quite sometime now that you have not mentioned about CIT. Now that news is out that I may reap good profit from the possible sale of its Hillview property, I wonder whether you wound comment on the impact on this counter and whether the current price of $0.54 still a good buy.
I am vested. I always appreciate your in depth analyses of those stocks that you are interested.
Regards,
CS

AK71 said...

Hi CS,

I do not believe that the divestment would result in significant income loss for CIT. CIT owns less than 70% of 63 Hillview Avenue anyway.

They bought the properties for $72.2 million in 2007 and are now asking for $330.0 million, if I understand the numbers correctly. Not bad. Of course, it is not yet certain whether anyone would pay the price they want.

As to whether 54c is a good buy, you have to ask yourself that question. Is the current annualised distribution yield good enough for you? Are you comfortable with the REIT's numbers (gearing etc)? Ask youself those questions and you would have the answer. :)

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