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3 Trusts in AK71's portfolio and their income distributions.

Thursday, October 24, 2013

I am expected to be quite bogged down by work in the near term and it will probably be a good idea to get more sleep in the meantime. However, reading pages 6 and 7 of The Business Times just now perked me up and I just got to blog about it.

3 Trusts I am invested in have announced their DPU for the last quarter:

The star is AIMS AMP Capital Industrial REIT which, regular readers would know, is one of my two biggest investments in S-REITs, the other one being Sabana REIT. As per my expectations, the annualised DPU of the REIT is now 11c as it declared a DPU of 2.75c for the quarter ended 30 Sep 13.

There are plans to bump up DPU in the next 2 years through AEIs, acquisitions and by maximising plot ratios. I will temper my optimism because if the REIT should try to lower its gearing, it could do another private placement and this would water down any potential increase in DPU.

Cache Logistics Trust which most analysts seem to favour announced a lower DPU of 2.126c, down 0.8%, year on year. Not a big deal although a bit of growth would have been nice. This is especially when distributable income actually rose 9.6% to $16.5million.

DPU came in lower due to 70 million private placement units in March this year. Regular readers know that I much prefer rights issues to private placements since retail investors like me never get to buy discounted units at private placements.


The third Trust is Frasers Commercial Trust (FCOT). It announced a DPU of 2.08c which is some 18.9% higher, year on year. Lower finance costs and lesser payment to holders of its Convertible Perpetual Preferred Units (CPPUs) are what helped to boost DPU.

A rough back of the envelope calculation tells me that the income distributions for the quarter ended 30 Sep 13 from these 3 Trusts will form approximately 7% of my total passive income from S-REITs this year. This will be very useful for my first year end holiday with my family in 5 years. I am looking forward to spending some quality time with my family and taking a longish break from work.

Always good to have positive news to perk us up in life.

Related posts:
1. Cache Logistics Trust: Initiated long position.
2. FCOT: DPU up 16.8% in 18 months.
3. AIMS AMP Capital Industrial REIT: Making money.

20 comments:

INVS 2.0 said...

Was just about to share with you regarding AIMSAMP's new DPU. :)

AK71 said...

Hi INVS 2.0,

I am very pleased that I chose to stick with George Wang from the early days when MI-REIT was recapitalised. :)

George Wang is one S-REIT insider who keeps buying. In the recent 10%dip in unit price, he bought more! He puts his money where his mouth is. Good man.

AK71 said...

Suntec Real Estate Investment Trust (REIT) announced a distribution per unit (DPU) of 2.289 Singapore cents to unitholders for its third quarter which ended 30 September 2013.

Its manager, ARA Trust Management (Suntec) Limited, said in a statement that the DPU of 2.289 Singapore cents is 2.6 per cent lower than the previous year.

http://www.channelnewsasia.com/news/business/singapore/suntec-reit-s-q3-dpu/860222.html

Steven Yap said...

Hi AK,

Good to go for a holiday and even better to know your holiday expenses is being paid for by the market^^.

SnOOpy168 said...

Good to hear this. I'd wished Super Banana has the same DPU growth too.

AK71 said...

Hi Steven,

For many years now, passive income from my investments in stocks has helped to pay for my expenses including holiday expenses. It is certainly very helpful especially when everything is getting more expensive over time.

AK71 said...

Hi SnOOpy168,

Compared to AIMS AMP Capital Industrial REIT's management, Sabana REIT's management has yet to prove themselves.

Sabana REIT has the potential to improve on its DPU. Will the management deliver? Time will tell.

The Sun said...

Have a great holiday with your family! Sometimes the intangible aspects of life are worth treasuring as well.

AK71 said...

Hi Sun,

Thank you. :)

I would say that the intangibles are more important in our personal lives. ;)

Tan said...

Hi AK

Another DPU increase for first reit ......

GREGG

AK71 said...

Hi Gregg,

Yup. I just read in The Business Times. This makes me happy! :)

INVS 2.0 said...

Didn't know of Frasers Comm. But looking at its NAV, I think it is a good buy at current price of $1.29. :)

AK71 said...

Hi INVS 2.0,

If we find valuations believable, then, buying at a discount to NAV is generally not a bad idea. :)

Elaine K said...

Hi Ak
May I know if you have considered Suntec Reit?It's current price is much lower than NAV

AK71 said...

Hi Elaine,

I retained a long position in Suntec REIT which I initiated at slightly under $1 a few years ago. I am quite sanguine about the REIT although I am concerned that DPU doesn't seem to grow.

From a few years ago till now, the DPU seems to have stagnated or maybe declined a bit. This is off the top of my head. I hope my memory is reliable.

I am not comfortable with the current distribution yield of 5.4% (at $1.70 per unit) although it could bump up a little with the completion of the AEIs in Suntec City. Would it hit 6%? I find it unlikely.

So, I might wait for a retracement before buying. $1.60 seems more comfortable as that gives a yield of 5.74% and it is more probable to see it hitting 6% from there with contributions from the AEIs. :)

With the spectre of increasing interest rates in the coming years, it is only prudent to demand a higher distribution yield from REITs.

Elaine K said...

Hi AK

Thank you for sharing your thoughts!

I also have a very small number bought at $0.95. Should have been more daring then!

I have to learn to be patient..to wait for the right price.

cheers
Elaine

AK71 said...

Hi Elaine,

As we emerged from the GFC, I found myself with a substantial long position in Suntec REIT of more than 200 lots! I just kept buying at one stage.

I divested more than 90% as its unit price recovered. A big chunk went into AIMS AMP Capital Industrial REIT, I think.

My memory not so good. Foggy.

CK said...

Hi AK,

for AIMSSAMP (and other reits), do you opt to take cash or opt for new shares, or both?

Easton

AK71 said...

Hi Easton,

I invest in REITs for income. So, I always take cash unless there is an opportunity to make more money through arbitrage. ;p

See:
AIMS AMP Capital Industrial REIT: DRP.

AK71 said...

Cache Logistics Trust (CACHE) reported its 1Q15 results which came in within our expectations. Gross revenue climbed 1.6% YoY to S$21.0m while inched up 0.3% to 2.146 S cents. CACHE has placed strong focus on securing new leases for its assets which have been converted from master-leased properties to multi-tenanted properties in Apr this year. Approximately 70% of its leases expiring in FY15 have been pre-committed. Nevertheless, we believe the leasing environment will remain challenging due to supply concerns and uncertain macroeconomic outlook. Given headwinds facing the Singapore industrial sector, CACHE has sought to diversify its operations by completing the acquisition of three distribution warehouses in Australia on 27 Feb this year for a total acquisition cost of A$75.6m. We raise our FY15 and FY16 DPU forecasts by 1.6% and 1.8%, respectively, to account for this development. Our fair value estimate thus increases from S$1.15 to S$1.17. Maintain HOLD.

Source:
OCBC Investment Research.

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