3Q 2017 passive income from S-REITs.

Although I did blog about REITs in 3Q 2017, I didn't make any changes to my investments in S-REITs. Pretty much the status quo.

Well, not entirely the status quo because there is the rights issue by Cache Logistics Trust which will close this evening. 




Since I have a small legacy position, I took up my entitlement and also applied for some excess rights.

As it is an exercise to strengthen the REIT's balance sheet, it does nothing to generate more passive income for me.

See:
Cache Logistics Trust Rights.




Anything exciting happened?

What would be the equivalent of something exciting in the world of investing for income?

Maybe, this. 

What would have been a big deal in 3Q 2017 in the S-REITs universe failed as Cromwell European REIT's IPO was pulled out. 

The reason was probably insufficient interest from investors and this was after the size of the IPO was cut too.







I had a disturbing vibe about the failed REIT IPO as it felt as if the sponsor was trying to dump a mish mash (i.e. rojak) of assets.

See: 
Cromwell European REIT cuts IPO size. 

Even so, it would have been interesting to have a new addition to the number of S-REITs available. I have no doubt that the REIT would have attracted retail investors who are yield focused.

When we plonk money in REITs, we must not think about them like how we would think about fixed deposits. 








REITs are more complicated than fixed deposits. They are investments, not savings.

It is perhaps worth reiterating here that we should avoid the instant gratification of yield. 

See: 
SingTel, Starhub and REITs.

Having said this, REITs remain relevant tools for income investors and I like to remind myself that all investments are good investments at the right price. 







My portfolio of S-REITs continues to benefit from investments made in 1Q 2017 as I received distributions from Starhill Global REIT, CapitaRetail China Trust and also an enlarged investment in IREIT Gobal.

Income from S-REITs in 3Q 2017:

$20,783.43

I was hopeful that there would be a slight increase in income compared to 2Q 2017 but there is a 1.36% decline instead.




This decline took place because industrial S-REITs continue to face headwinds due to general oversupply of industrial space and weak demand in a slow economy. 

See, for example:
Decline in Soilbuild REIT's DPU.

As there are many industrial S-REITs in my portfolio, as a group, their weaker performance in the quarter was a drag.

There is talk of a pick up in the global economy which will give Singapore's economy a lift. If it happens, it should benefit industrial properties too.




In the meantime, I am happy with the investments made in 1Q 2017. 

If I did not make those investments, the decline in income generated by my portfolio of S-REITs would have gone unmitigated.

The top 3 income contributors for the quarter are the following:

1. AA REIT
2. FIRST REIT
3. IREIT Global

Related post:
2Q 2017 income from S-REITs.