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AIMS AMP Capital Industrial REIT: 103 Defu Lane 10.

Tuesday, January 29, 2013

Readers might want to do a recapt before continuing:

1. AIMS AMP Capital Industrial REIT: Insights
(dated 30 March 2011)
2. AIMS AMP Capital Industrial REIT: Making money
(dated 3 July 2012)

With phase 1 of 20 Gul Way's re-development completed, the management of AIMS AMP Capital Industrial REIT is going ahead with another re-development. This time it is at 103 Defu Lane 10, a site with a land lease till 2043.

It has been disclosed that the re-development will be fully funded by debt. So, upon completion in mid 2014, we can expect DPU accretion. Not only is this the case, the new property will be some $30m higher in value compared to the current property on site.

I shan't say too much as readers could look at the presentation slides which are self explanatory: here.

The management of the REIT continues to impress under George Wang's leadership, no doubt. This could be another Ascendas REIT in the making and loyal unit holders would be amply rewarded.


fishcrazy said...

The issue here is that the price of AIMS AMP REIT has run up some over the last 6 months and I am left to wonder what is a good price to go in and hold for the next 12 months.

fishcrazy said...

Problem is its share price has run up quite a bit. I used to think $1 is a fair value price for long term I don't know.

AK71 said...

Hi fishcrazy,

We might all have fair values in mind for all the REITs we are looking at. There is nothing wrong with this. I do it too.

If unit price has exceeded the fair values we have in mind, we can either:

1. Not look at that REIT anymore


2. Revisit the premise upon we built the fair values.


3. Examine our expectations with regards to current day realities and decide if our strategies are still valid.

You choose. :)

Unknown said...

Am I too evil to wish for a market crash so that my few shortlisted reits will be more attractively priced? If I am to revise my rules for selecting reits, none of my current rules will remained.

Unknown said...

Am I too evil to wish for a major correction in the market? Quite fed up with losing money by inflation.

AK71 said...

Hi EG,

Personally, I won't wish for a market crash. It would cause immense suffering for many, investors or not.

However, I am realistic enough to know that one will happen. It is just a question of when.

I know people are upset with their savings earning almost nothing in bank accounts. However, it is not a bad thing to have money in the bank. We always need a war chest.

Having all or most of our money in the bank, however, is not a good idea.

Should we revise our rules for selecting REITs? The rules we have really depend on what we want.

For example, if we want to buy at a discount, we would buy only at below a REIT's NAV/unit.

Rules are good to have but with new circumstances, rules could get outmoded. We have to make decisions as to whether to hold on to those rules or make new ones.

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