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Evening with AK and friends 2017. Happening on 6 October 2017.

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Bought more VIVA Industrial Trust and worried.

Friday, July 28, 2017

Reader:
I learn of your blog from reading an article you wrote about Viva Industrial Trust for a magazine. I am very concerned now because I just bought more after reading research provided by my broker. The dividend is expected to increase. Is the land lease situation really bad?




60 years land lease from 1961.
Expiring in 2020, no extension is allowed.


AK:
I don't remember writing for any magazine or maybe I did but I just don't remember.


Whether an investment is good or not depends in part on the motivation of the investor. 

If you are invested in Viva Industrial Trust for income, you have to question not only how high the yield is, you have to question how sustainable it is going to be?

Can there be any other motivations for investing in Viva Industrial Trust? 

The belief that, perhaps, the manager could increase asset value and to sell assets to an unsuspecting (or gullible) party at a higher price before the land leases end? 

Of course, this would make the decision more a speculation than an investment.

I know what I have said does not sit well with everybody and I can even prove it. ;p

Hey, I am only a blogger and I anyhow talk to myself in my blog lah. Don't care me hor.


Listen to John Lim better. Who is John Lim? Who else?

In an interview, John Lim said there is an issue with the structure of the Singapore industrial property market. The land tenures are relatively short and valuations will fall because they are aligned to tenure. 


Not I say. John Lim say hor.


This is why Cache Logistics Trust is diversifying into Australia. Incidentally, so has AIMS AMP Capital Industrial REIT. Of course, we also have a new comer, Frasers Logistics and Industrial Trust which is a pure Australian play.

Related posts:
1. VIVA Industrial Trust's 9% yield.
2. AA, Soilbuild and VIVA REITs. 

2 comments:

Laurence said...

Hi, AK,

I just discovered that of all the Hospitality Reits/Trusts listed in SGX, only Ascott Residence Trust is included into the CPFIS. Would you know why this is so?
Thanks.

AK71 said...

Hi Laurence,

Linked to Capitaland which is linked to Temasek?

I anyhow say one lah. I also dunno. ;p

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