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Showing posts with label AIMS-AMP Capital Industrial REIT. Show all posts
Showing posts with label AIMS-AMP Capital Industrial REIT. Show all posts

DBS, OCBC and UOB to pay well! Q3 2023 passive income to be higher! T-bill auction with free money from AA REIT!

Friday, July 28, 2023

Whenever I could find some free time, I would go out to sea in the last few days.

It is my latest hobby!

Well, in a sense, anyway.

Look at my latest ship!



Look at those cannons!

If you are interested in some naval warfare too, this is my latest free to play find.

Absolutely free to play and perfect if you feel like destroying stuff to feel better after a rough day.

Use my referral link for the Asian server and both of us will get some freebies in the game:

World of Warships. (AK's referral link.)




Anyway, now that the serious stuff is out of the way, let's look at other stuff.

In my last blog, I talked to myself about the bumper interim dividend from UOB.

Up by 40%, it made me giddy with joy!

I expect OCBC and DBS to pay higher dividends too.

This means they should at least match their dividends in the last quarter.

If nothing goes wrong, my passive income for Q3 2023 should be somewhat higher than for Q3 2022.

If this pans out, it would be quite a feat since 2Q 2022 passive income generated by my investment portfolio increased by an impressive 42% compared to 2Q 2021 (mostly because the banks were still paying lower dividends in 2Q 2021.)

Whether passive income in Q3 2023 would be higher than Q2 2023 is less certain and, for that, I would wait and see.




On to another happy discovery.

When I checked my bank account, I found a few thousand dollars deposited by my old friend, AIMS APAC REIT (AA REIT.)

With my war chest largely depleted by IREIT Global's rights issue, getting some free money from AA REIT makes me love the REIT more.

As there will be quite a bit more dividend to be received from UOB and probably OCBC and DBS too next month, I decided to increase the quantum in my application for the upcoming 6 months T-bill with some of the money.

It is now open for application and the auction is happening on 3 August.

I will be going for non-competitive bid, as usual.

There is no need to agonize over a competitive bid since whatever the cut-off yield might be, it would most likely be higher than whatever interest rate the banks are offering for a 6 months fixed deposit.




So, the exercise to strengthen the fixed income component of my investment portfolio continues.

It gives my portfolio greater stability.

It gives me greater peace of mind to know that if I need more money, I have a T-bill ladder I can rely on.

This means I would not have to sell my stocks at prices not of my own choosing if some things should go terribly wrong in life.

Being forced to do something, not having control over our lives is not a good feeling.

With the yield curve still inverted, 6 months T-bills are going to remain rewarding.

So, they help to keep me sane and happy at the same time.

If AK can do it, so can you!

Related posts:
1. 2Q 2023 passive income.
2. 2Q 2022 passive income.
3. T-bill ladder is attractive.

3.89% T-bill. DBS and OCBC fined. IREIT Global.

Friday, June 23, 2023

I have been busy gaming in the last few days as Neverwinter celebrates its 10th birthday.


Time really flies and I have been adventuring in virtual worlds for 8 years.

Of course, I have been retired from gainful employment for just as long.

I remember saying that CPF is a pie we would all get to eat one day if we did the right things.

Well, in another 3 years, I would get to eat the pie.

It is both a happy and depressing thought.

Anyway, like I shared in my last blog, I ignored AA REIT's rights issue.

It meant accepting an 11% reduction in income from the REIT in future.

I am staying invested in AA REIT but as a retiree without plenty of excess funds, I am less willing to deploy money into any venture that does not add to my income in the very near future.

Even if I were to take up my rights entitlement, unless I am willing to apply for a lot more in excess rights, I would still suffer some income reduction from the REIT.

Much better to put the money in T-bills in my case.




This provides a nice segue into the next topic.

My non-competitive bid for the recent 6 months T-bill was 100% filled.

3.89% p.a. huat ah!

Could have been higher but it is obvious that many kiasu people were placing very low bids of possibly under 2% p.a. in order to secure their T-bills.

Proof is in the pudding with average yield at a paltry 3.07% p.a.

I saw that and it was a face palm "Alamak AK!" moment.

I have no words.

Speechless.

OK, I stop.







Another "Alamak AK!" moment was DBS and OCBC being fined $2.6 million and $600,000 respectively by the Monetary Authority of Singapore.

It is a ton of money to AK but it is probably like being stung by a mosquito for the banks.

I am staying invested in DBS and OCBC, of course.

Still looking to add to my investment in OCBC and UOB at supports.

Hint: OCBC tested immediate support which has risen to $12.30 a share just now.

Longer term support for OCBC is still around $12 a share.

I would add to my investment in DBS too but its stock price would have to decline much more for it to be attractive to me.

Nothing to see here, move on.




I am gathering my funds to take part in IREIT Global's rights issue now.

Must pay by 11 July.

If I am successful in getting all the excess rights I aim to get as well, IREIT Global could become an investment as big as my investment in OCBC.

Yes, I am emptying my war chest for this.

This is an exciting thought but also a scary one.

I might have to do some rebalancing of my portfolio later on.

For now, I just like the idea of increasing my income from IREIT Global by at least 16%.

That's all for now.

If AK can talk to himself, so can you!

Related posts:

Ignoring one rights issue and buying more of another.

Tuesday, June 20, 2023

Recently, I talked to myself about helping my parents to pay for their rights entitlement for both AIMS APAC REIT and IREIT Global.

This will take a chunk of money.

As these two REITs are also two of my largest investments, I have to set aside a relatively large amount of money to pay for my own rights entitlement too.

After much thought, I made the decision to forgo my own rights entitlement for AIMS APAC REIT for the following reasons.

1. The money raised is not for any activity that would immediately generate more income.

Of course, I might see DPU increasing again in future if they use the money prudently for AEIs and redevelopment.

However, I won't see any return on the proposed additional investment right away.

2. My investment in the REIT is already free of cost.

All income generated by the REIT is really free money for me.

I don't have to add to my investment to have a good outcome even if I should take an 11% reduction in income from the REIT in the meantime.

Readers who have been following my recent blogs and the comments sections might remember that I talked to myself  about these.




Now, hot from the press, we have firm details on IREIT Global's rights issue.

161 for 1000 units at 40.8c a unit.

IREIT Global initially used an illustrative rights unit price of 45c when they announced the proposed acquisition of retail parks in France.

That sent their unit price tumbling down to 44.5c at one point.

When readers asked if that was a good price to buy, I said that it appeared attractive to me with a potential 8% distribution yield.

However, I was waiting to buy at 42c because that was where the chart showed stronger support.

I also said in another reply that we must remember that 45c was only an illustrative price.

With IREIT Global already trading at 45c a unit, the rights issue would have to be at a lower price to be attractive.

So, I would wait.

Now, priced at 40.8c a unit, it is very attractive to me.

I wish I had more money in the war chest to apply for more excess rights.




At a unit price of 40.8c, I am looking at a potential 8.8% distribution yield from mostly freehold assets.

This is also on the back of a relatively strong balance sheet with gearing ratio at 33%, post rights issue.

With interest rates likely to stay higher for longer, I keep saying it would be business entities with stronger balance sheets that would see the light at the end of the tunnel.

The Fed chair has already hinted that a lowering of interest rates would not happen until 2 years later which means sometime in 2025.

Fortunately, IREIT Global has almost 100% of its debt on low interest rates fixed till late in 2026.

It is always darkest before the dawn.

I am quite happy to be paid while I wait.

If AK can talk to himself, so can you!

Related posts:
1. Rigths issues and parents.
2. T-bills and REITs: My plan.

UPDATES. Time and money. Rights issues and parents.

Tuesday, June 13, 2023

First update is on the subject of "time".

In recent weeks, I settled into a routine of producing videos and then publishing the transcripts here. 

Both the video and the blog would be released within minutes of each other.

I kept doing that because I had an inkling that most people who "eavesdrop" on AK don't really enjoy eavesdropping.

They really enjoy reading AK's diaries.

Tsk, tsk.

Terrible.

Anyway, looking at the viewership and readership numbers, it is quite apparent.

As I am a hobbyist YouTuber just like I am a hobbyist blogger, this isn't a tragedy.

In fact, it could be a blessing in disguise.

Although I still enjoy making YouTube videos as a hobby and I have produced videos almost daily for more than a year, I might do it less often as it is more time consuming.

So, in future, there might be more blogs like this where there would not be a corresponding video.

I need more than 24 hours a day to do all the things I want to do in retirement! 

I really have quite a bit of catching up to do in the online games I am still playing, for example.




Second update is on the subject of "money".

Some readers might know that my retiree parents are invested in AIMS APAC REIT and IREIT Global too.

Apart from their CPF and SRS savings, the two old folks have rental income from a shoe box apartment and dividends from some stocks.

As I am paying the property tax and maintenance of their rental property, they are able to enjoy the rental income in full.

Being retirees, they are living off passive income as they should.

However, total passive income they get in a year is only about half of what their total yearly income was before they retired a few years ago.




I remind myself of the following.

If not for us children, for sure, they would have been able to save a lot more money for their retirement.

There is also the fact that their CPF and SRS savings would be depleted in their mid 80s which is only another few years from now.

For readers who have been following my blogs on the topic of providing financial support for my parents, this probably throws more light on why I have significantly increased the quantum in recent years.

Since I do not expect my own expenses to grow significantly in future, I am ready to provide even more financial support to my parents if required.

This is so that they would not have to make too many changes to their lifestyle in retirement or compromise on their standard of living in their old age.





Alamak!

This is supposed to be a quick update and I just went rambling off.

A thousand apologies!

Back to AIMS APAC REIT and IREIT Global.

I have decided to help my parents pay for their rights units.

Of course, consistent with what I have said before, I will keep an eye on the current unit prices as well.

Mr. Market seems to be feeling rather pessimistic and if I should be offered prices which are much lower, I would buy from the open market.

In such an instance, I would be leaving the sponsors of the REITs to pick up my rights entitlement in the form of excess rights for them instead.

In fact, I have overnight BUY orders to buy more units in AIMS APAC REIT at $1.16 a unit and IREIT Global at $0.42 a unit as, technically, these look like strong supports to me.

To be honest, it would be a pleasant surprise if my orders are filled but I know never to say never.




Of course, helping my parents to increase their investments in the REITs this way would mean that I would have less money to add to investments in my own portfolio. 

However, trying to make more money for myself really hasn't been a priority for me for quite a while now.

Why do I say this?

Is having more money no longer important to me?

Am I OK with growing poorer over time?

Hmm.

I really don't want this to be a long blog.

So, I might blog about this topic a bit more later in the week.

Let me end this update here for now.

If AK can talk to himself, so can you!

Related post:
Do we give our parents enough money?

T-bills, AIMS APAC REIT and IREIT Global. My plan.

Friday, June 9, 2023

This is the transcript of a YouTube video I produced recently.
-----------------------
Q2 and Q3 are usually good quarters for me in terms of passive income.


After setting aside money for personal expenses, parental support and gifts, the plan was to use some of the money to increase exposure to T-bills.

I still find 6 months T-bills to be quite attractive.

Of course, regular readers would understand why.

I have always had a soft spot for risk free and volatility free CPF which pays between 2.5% to 4% per annum.

Oops.

My apologies, it should be 2.5% to 4.01% per annum.

So, with similar characteristics, it is no surprise that I am attracted to T-bills these days like a bee is to honey.





The latest 6 months T-bill auction saw a cut-off yield of 3.84% per annum.

I said in an earlier blog that I would be happy if cut-off yield remained the same at 3.85% per annum.
3.84% per annum is enough to make me quite happy.

Anyway, like I said, I had planned to use some incoming passive income to increase exposure to T-bills.

That plan has to be put on hold now.

I would have to be contented with simply recycling money from maturing T-bills into new ones.

This is because of two rights issues which are coming up.

AIMS APAC REIT and IREIT Global are two of my largest investments.

So, together, I would have to put aside a relatively large amount of money for the rights issues.



For AIMS APAC REIT, we are likely to see a slight near-term reduction in DPU.

This is because part of the plan is to use the funds for asset enhancements and possible redevelopment of existing assets.

Nothing immediately income generative.

With more units in issue, including those issued for the private placement, existing shareholders could see roughly a 6% decrease in DPU if we subscribed only to our rights entitlement.

We can apply for excess rights which would increase the income we receive from the REIT if we are successful, of course.

However, as my resources are pretty limited, I am alright with receiving a bit less income from AIMS APAC REIT post rights issue for a while.

For me, this is not a terrible outcome as I have said many times before that my investment in AIMS APAC REIT has been free of cost for some time.

All income distributions from the REIT are really free money for me.

So, I will subscribe to my rights entitlement and just enough excess rights so that I do not end up with odd lots.



As for IREIT Global, they do not have any private placement in their fund-raising exercise.

So, there is no risk of DPU dilution if we do not apply for excess rights.

They are raising funds using a combination of debt and rights issue.

I also like that the funds they are raising will be used to purchase income generating assets right away.

This is why I said that IREIT Global is really inviting existing shareholders to invest in more properties.

The sponsors will be doing this alongside shareholders as they hold about 50% of the units in issue.

Therefore, I find their rights issue to be more interesting than the one by AIMS APAC REIT.



I also like that at 45 cents a unit, we would be getting a distribution yield of around 8% which is pretty attractive.

Of course, this is not without risk and volatility, unlike T-bills.

However, for me to forgo increasing exposure to T-bills for this rights issue is not a tragedy.

Remember, I am just talking to myself here.

It should be quite obvious to anyone that this is a plan that seems fine for me but it might not be suitable for others.

If AK can talk to himself, so can you!

References:
1. AA REIT and IREIT: Rights issues.
2. When to dismantle T-bill ladder?

Buy CLCT? AA REIT and IREITs' rights issues OTW.

Thursday, June 1, 2023

For readers who who are not subscribed to my YouTube channel or who simply prefer reading blogs to watching videos, I produced 2 videos recently and these are the transcripts.
------------
This was a comment from a reader yesterday.

1. For Capitaland China Trust, do you think sentiments towards China are overly pessimistic?

Hence, could the Trust be trading at a fair price 
now?

2. I am sure you saw the right issue on AIMS APAC Real Estate Investment Trust.

Any comment on that?

AK had this to say about China.

For CapitaLand China Trust, I am just holding on to what I have now.

After seeing how China handled the COVID-19 pandemic and also what they did to their biggest tech companies, I don't really know how to read investments in China now.

Another reader said this about Capitaland China Trust.

Hard to wait for the banks when REITs like Capitaland China Trust kept enticing me with lower and lower prices. How like that?



AK said to the reader.

I have been holding on to my position in Capitaland China Trust and not done any buying or selling.

I am not sure as I am more wary of policy risks in China than anything else right now.

Jamie Dimon, CEO of JP Morgan, said this in a recent interview.

China is a far more complex situation now.

He was mostly referring to policy risks, but he was also concerned about geopolitical risks.

Too much uncertainty caused by the Chinese government.

We can also see that Chinese economic recovery has been weak and, to be honest, I agree that much of it has been self-inflicted.

It is not hard to understand that I would rather put more money into investments I have less to worry about.

AK is becoming timid with age.



I had this to say about AIMS APAC real estate investment trust.

The proposed rights issue is relatively small, but it is necessary so that the REIT does not take on more debt to grow organically.

The sponsor has also thrown its weight behind the exercise.

The sponsor, which holds about 75 million units, or about 10% of the total units in the real estate investment trust, has provided an irrevocable undertaking to the manager and the joint bookrunners and underwriters, which include DBS Bank.

The sponsor will accept, subscribe and pay in full for its total provisional allotment of the new units under the preferential offering.

They will also make applications for the number of excess new units under the preferential offering which are not taken up by other unitholders.

Hence, demonstrating their confidence in the real estate investment trust.



The exercise will raise around $100 million through the private placement and preferential offering.

Private placement is to place about 56 million to 58 million units at an issue price of about $1.21 to $1.25 per unit to raise proceeds of $70 million.

The non-renounceable preferential offering or rights issue will raise another $30 million.

This is through the issuance of about 25 million new units to existing eligible unitholders at about $1.19 to $1.23 per new unit.

Existing unitholders will be eligible to an advanced distribution of between 1.7 cents to 1.9 cents per unit.

This would be for the months of April and May.

The record date to be entitled to the advanced distribution and the eligibility to participate in the preferential offering is at 5pm on June 9.



The funds raised will help unlock greater value organically through active enhancement and re-development strategy.

It will also help to secure growth opportunities through targeted acquisitions.

I rather like rights issues which raise money in order to generate more income for the investors.

This is a relatively small rights issue and, therefore, not too demanding.

If AK can talk to himself, so can you!

(Continue scrolling down to read about IREIT Global and its rights issue.)

Reference:
REITs and rights issues.



I have said before that I rather like rights issues if the money raised is used to generate more income for investors.

In the latest fund raising exercise by IREIT Global, this seems to be the case.

They are proposing to acquire 17 retail parks in France.

A strong reason to invest in these assets is that this retail format will continue to outperform in the context of global inflation partly caused by the COVID-19 pandemic.

"The popularity of hard discounters, discounters and outlet stores in France has risen exponentially in recent years.

"Retail Parks, an Out-of-Town asset class, have been resilient through the COVID-19 pandemic due to their accessibility, open-air format, wide range of available spaces, parking facilities, manageable operational cost, value-for-money brands and for some retailers, omni-channel experiences."



These 17 retail parks are leased to B and M Group, a European discount retailer listed on the London Stock Exchange with a market cap of about 4.7 billion Sterling Pounds.

They have been occupying these assets since 2005 on average.

There is a Weighted Average Lease Expiry of 6.8 years but there is an option for lease break 4.6 years from now.

A combination of competitive rents due to out-of-town locations and a resilient retail model which is discount retailing suggests to me that this is a good investment.

Of course, all investments are good investments at the right price.

The asking price is approximately $112 million.

This gives approximately 1.7% discount to the average of the two independent valuations of approximately $114.1 million.

The price is very close to valuation.

Although this might suggest that we are not getting a fantastic deal, it also suggests that this kind of properties is probably in high demand.

The seller isn't desperate to sell.



However, similar to the purchase of Woolworth's HQ in Australia by AIMS APAC real estate investment trust, I like that these 17 properties in France have excess plot ratios which could be developed for more rental income in future.

I would take this potential into consideration since we should always have a long term perspective when investing in good income producing properties.

So, apart from rental escalation being pegged to inflation, this could be another way to extract more income from the assets.

When we take into consideration that new developments of such assets are being restricted in future due to new French regulations, these assets will become even more valuable in future.



This reminds me of Saizen REIT when its properties were valued at under replacement cost.

No one in his right mind would construct a new building when buying an old one would be much cheaper, and would give similar or higher rental yields.

So, the assets Saizen REIT was holding were undervalued.

In the case of out-of-town assets in France, new ones are apparently not allowed by law.

With the future in mind, we could make the case that these assets could be undervalued.

Of course, having these properties in the portfolio would reduce concentration risk which has been a major pain point for many investors forever.

I don't really care for the other advantages put forth by the management.



The next thing I want to know is how the acquisition is going to be funded and whether it is going to be yield accretive.

Apparently, it is going to be yield accretive.

Pro forma adjusted FY2022 accretion of 2.0% was computed based on audited FY2022.

This is with the assumption that Darmstadt Campus is 100% vacant for FY2022 from 1 January 2022 with nil revenue but with operating expenses.

OK, how much do investors have to pay?

Cost of properties = $112 million.

Expenses related to purchase = $20 million.

Now, I know how people paying ABSD in Singapore feel.

The deal will be funded by the following.

1. A non-renounceable underwritten preferential offering of new Units to existing Unitholders on a pro rata basis or a rights issue.

2. External bank borrowings.

3. Borrowings from Tikehau Capital.



Both Tikehau Capital and City Developments Limited, the joint sponsors, and the manager, will subscribe in full their allotment in the rights issue.

They will also subscribe to excess units which other investors do not take up, such that their aggregate subscriptions would amount to a maximum of $40 million.

IREIT Global has a market capitalization of around $550 million.

As the sponsors jointly hold about 50% of the total units issued, without further information, I can only hazard a guess that we would see around 10% increase in the number of units issued.

We could assume that approximately 168 million new Preferential Offering Units might be issued at an illustrative issue price of 45 cents per Preferential Offering Unit.

This could raise gross proceeds of approximately $75 million.

So, if we like this proposed investment in French retail parks, we have to be ready to increase our investment in the real estate investment trust by about 10% through the rights issue.

If AK can talk to himself, so can you.

Reference:
IREIT Global presentation.

$1.60 target price for AA REIT. Really? Why so good?

Sunday, May 14, 2023

I make investment decisions based on my own analyses.


However, as a retail investor, I am cognizant of the fact that my analyses are usually incomplete.

I have compared the exercise to a game of jigsaw puzzle.

As long as I have the crucial pieces of the jigsaw puzzle in place, I should be able to make a decision.

I have been blogging and making videos about AIMS APAC real estate investment trust.

It has been one of my better investments for income which has also appreciated in value over the years.

Unlike some other investments which gave me worries from time to time, and a few investments even gave me near heart attacks, AIMS APAC REIT has given me peace of mind.

(Before I go on, if your eyes are feeling tired and you would rather listen to AK talking to himself, you can listen to the video which I have embedded below instead.)




When I remember that I have been invested in the real estate investment trust since the Global Financial Crisis, that is a very long track record.

AIMS APAC REIT has paid me consistently, through good times and bad times.

Still, there could be things I don't know about the real estate investment trust.

So, when I chance upon analyses done by experts, I would read them to see if I might find some missing pieces of the jigsaw puzzle.

Even opinion pieces can be interesting.

In a report dated 8 May, DBS research published a higher target price of $1.60 per unit for AIMS APAC REIT.

The target price is quite a bit higher than what AIMS APAC REIT is trading at.

Apparently, the researcher at DBS was surprised that the real estate investment trust delivered a better performance than what they were forecasting.

The very strong positive rental reversions of 18.5% and record high portfolio occupancy of 98% were the reasons given for why the real estate investment trust outperformed the researcher's expectations by as much as 15%.

It doesn't stop there.




DBS research house thinks there could be more upside because of two reasons.

1. Weighted average lease expiry or WALE of 1.4 years for the logistics and warehouse segment is the shortest in AIMS APAC REIT's portfolio.

Usually, we want a longer WALE for stability.

However, as the passing rent of $1.22 per square foot for this segment is below the current market rate of $1.40 to $1.80 per square foot, the shorter WALE is a positive for AIMS APAC REIT.

We can expect the strong rental reversions for logistics facilities to continue.

2. AIMS APAC REIT plans on growing organically through more Asset Enhancement Initiatives and redevelopment opportunities.

I have been blogging about the potential for AIMS APAC REIT to maximize land use of many assets in their portfolio which have underutilized plot ratios.

So, this is not something I didn't already know.

Anyway, the higher target price by DBS took into account not only past performance but also expected future performance.




As for the possible downside, AIMS APAC REIT has a high proportion of loans or around 88% hedged to fixed rate.

They also do not have any refinancing requirement until November 2024 when a $100 million MTN will be due.

Will AIMS APAC REIT trade at $1.60 a unit in the future?

It is definitely possible as it has done so in the past and it could do so again.

However, that's not how I would approach the real estate investment trust as a possible investment.

Why not?

I am mostly an investor for income and I care more about whether I will be receiving regular meaningful income from an investment.

If the market price of that investment should go up, it is a bonus.

If it doesn't go up, as long as it keeps generating income from me and doesn't make me worry, I am happy enough to stay invested.

If AK can do it, so can you!

Reference:
Why AA REIT?



Why AA REIT? Still one of my largest investments.

Thursday, May 11, 2023

During "Evening with AK and friends 2023" which took place in the evening of 10 May, I said that I liked a few real estate investment trusts listed in Singapore.


I mentioned a couple of videos I produced on some possible red flags to look out for when investing in real estate investment trusts.

As for real estate investment trusts which I liked, I mentioned AIMS APAC REIT as being one of them.

AIMS APAC REIT is one of my largest investments and this has been the case for many years since the Global Financial Crisis.

I told a long story about the real estate investment trust, and I hope the audience wasn't bored by it. 

Anyway, I shared some of the reasons why I liked AIMS APAC REIT and still like it after so many years. 




George Wang, the person who led the recapitalization exercise together with AMP back in the Global Financial Crisis has a meaningful stake in the real estate investment trust. 

He is the chairman of the management team, and he said the following recently. 

“For a structure to grow tall, its foundations must be strong and sturdy. It is only through the disciplined enhancement and selection of strong foundational assets that we are able to achieve financial resilience and sustainable growth. The quality of our portfolio has underpinned our robust performance throughout the COVID-19 pandemic and this period of rapid interest rate hikes, and I am very pleased to see our FY 2023 DPU increase by 5.1%, following FY2022 DPU increase of 5.7%." 

Leaving aside the numbers which are commendable given the challenges, I really like what he said about foundations being strong and sturdy to grow.

Very down to earth. 

I really like that he did not lead the rescue of the real estate investment trust so many years ago and then left everything to the management team. 

It is evident to me that he is still active in giving directions. 




During "Evening with AK and friends", I said that I liked AIMS APAC REIT because of the way they pursue growth. 

The CEO said this recently. 

"Looking ahead, our markets remain attractive and continue to offer abundant growth opportunities despite market headwinds. We are actively reviewing opportunities within our portfolio to drive organic growth, which includes adding value through active lease management to secure higher contracted rents, to underpin our future earnings." 

The real estate investment trust still has properties with underutilized plot ratios. 

The management has a track record of successfully redeveloping such assets to grow value and income for investors. 

I am always wary of real estate investment trusts which keep buying properties, no matter the quality in order to grow and to collect fees, of course. 

It is like growth at all costs. 

Sometimes, growth can be too costly for us as investors because we are the ones who end up having to pay the price.




We have to be wary of managers who would even suggest buying properties which are only half occupied or properties with very short remaining leases of 15 years or so, for examples. 

The only people who would surely make money from such situations are the managers. 

Investors have to be more discerning on what kinds of deals to support.

Always ask if it makes sense or if we should be parking our money somewhere else?

Bear in mind the following.

Money should go to where it is treated best or even if this place is not the best place, it should be treated better here than in most other places.

Most people are incentivized by fees and there is nothing wrong with this if they made decisions which would benefit everyone. 

However, many people are selfish, and we have seen ample examples in real estate investment trusts listed in Singapore. 

I have many blogs about Sabana, VIVA and ESR, for examples, if you care to read more. 




Anyway, back to AIMS APAC REIT. 

They own a portfolio of 26 industrial properties in Singapore and three in Australia. 

I like their relatively strong balance sheet with aggregate leverage at 36.1% and a blended debt funding cost of 3.4% and a weighted average debt maturity of 3.1 years. 

About 40% of their portfolio is in the Logistics and Warehouse segment. 

This segment has been experiencing double-digit rental growth across the four quarters, with leasing demand largely driven by third party logistics providers. 

In FY2024, 21.4% of leases are due for renewal, of which 90.6% are from the Logistics and Warehouse segment and this presents strong positive rental reversion potential. 






They also completed the conversion of a multi-tenanted lease to a master-lease arrangement for 23 Tai Seng Drive in FY2023. 

Following an asset enhancement initiative or AEI which cost $1.6 million, the property is fully leased to Racks Central, a data center operator, for an average lease term of seven years. 

It also lifted the valuation of the property by 32.0% from $29.4 million to $38.8 million on 31 March 2023. 

I really like their strategy of organic growth to create value. 

The manager is also evaluating several potential asset enhancement initiatives and redevelopment projects. 

Upon completion, these properties are projected to deliver a stabilized net property income yield of between 7.0% to 8.0%. 




AIMS APAC REIT has been and still is one of my largest investments. 

I believe that the real estate investment trust will continue to bring home the bacon. 

Leadership provided by George Wang who has skin in the game, a capable management team, a relatively strong balance sheet and a shareholder friendly strategy to grow value are just a few reasons to like AIMS APAC REIT. 

Whether you should have AIMS APAC REIT in your portfolio depends on what you are looking for. 

Remember that AK has been invested in AIMS APAC REIT for donkey years starting from the time when each unit was only 17 cents before 5 to 1 share consolidation took place a little later. 

You want to ask if there are better investments than REITs now in an environment where money is significantly costlier.

Having said this, well run REITs which offer a reasonably attractive distribution yield will always have a place in any income investor's portfolio. 

If AK can do it, so can you!

P.S. After "Evening with AK and friends 2023" ended, I had a few more thoughts to share. I published a blog in the wee hours of the morning. See:



AIMS APAC REIT: Is gearing level too high?

Monday, May 23, 2022

I have decided to publish my reply in response to a reader's comment that AA REIT's gearing level is at 51% as a blog.

This is because I have received similar comments in recent months.

Having my response published as a blog will make it easier for me to point readers who leave me similar comments in the future to a ready response.

My reply:

Hi patrol, 

I don't know which piece of research that is but AA REIT's latest published gearing level dated 27 April was 37.5%. 

If you are referring to the perpetuals which AA REIT has on the balance sheet, there was a discussion in the comments section here in ASSI a few months ago in February. 

You might be interested to read those comments in this blog: 





Having said this, with interest rate rising, if AA REIT were to raise funds to strengthen its balance sheet, it isn't a bad idea. 

Unlike IREIT Global which retains 10% of its distributable income, AA REIT distributes 100% of its distributable income to investors. 

This is a reason why IREIT Global's balance sheet is so strong. 

In another conversation in the comments section, I said that if AA REIT were to take a leaf from IREIT Global's book and retained 10% of its distributable income, it might not be a bad idea too. 

I said a lot more in those comments like why I was reducing my investment in Centurion Corp. but didn't see a reason to do so for AA REIT yet. 

You might want to read those comments which you will find in this blog: 


You might also be interested in this blog: 




Lost more on Alibaba and $200K left for AIMS APAC REIT.

Wednesday, March 16, 2022

Another reader left me a comment but didn't want his identity known.

So, not publishing his comment which has a link to his page.

The comment:

Dear AK 

Thanks for selflessly sharing your knowledge, experience and wisdom...

I recently found your blog when i googled for news on Alibaba...

Bought some Alibaba when so many said it was cheap and bought more to average down...

Wish i didn't because now lost even more... really a lot...

Your investing style seems rock solid and i want to learn more from you...

I only have about $200,000 cash left which can be invested...

Thinking of putting it all in Aims Reit because with war in Europe it is safer than Ireit...

7.5% yield now will be $15,000 passive income a year... will help me recover...  

Correct me if i am wrong...  wish i knew...




Dear BK, 

Welcome to ASSI and I am glad you have found it useful. :) 

I don't give advice. 

Not allowed to and don't want to. 

Responsibility scares me. -.-" 

A few things though. 

Please remember that 

Putting money in a REIT is not putting money in a fixed deposit and we should not look at distribution yield only. 

Putting all our money in a single investment leads to concentration risk and if that investment should go bad, we are sunk. 




AIMS APAC REIT is a big investment in my portfolio but it isn't my only income generating investment. 

You might be interested in the following blogs:




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