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Largest REIT investments updated, December 2021.

Thursday, December 16, 2021

The last time I had a blog on this topic was in April 2020.

Back then, Mr. Market suffered a dramatic breakdown and took quite a long time to recover.

After almost 2 years, it still looks like it will be a while more before we are out of the woods, no thanks to the new Omicron variant of COVID-19.

The world is the way it is because there are too many greedy people, too many selfish people, too many ignorant people and too many malicious people.

Very unfortunate but very often bad things happen because of irresponsible human behavior.

If we are not careful, we might see Singapore becoming a "true democracy" with people against vaccination marching in the streets which, of course, would give the virus opportunities to infect even more people and possibly mutate again.




I feel that having a choice is a good thing but social responsibility is more important because we live in a society.

If we are not part of any society, if we live all alone on an island, then, we are free from social responsibility.

Personal freedom of choice is plain rubbish if we choose to put everyone else at risk.

It is similar to what I said before in many blogs in the past about being financially responsible because we shouldn't be a burden to society.

Some readers might remember my blogs on those protestors in Hong Lim Park asking for their CPF money to be "returned" to them.

See:
CPF: So near and yet so far?




Anyway, before I digress further which I am inclined to do, here is the update.

Largest REIT investments (each $100,000 or larger in market value.)

My largest investment in a REIT used to be AIMS APAC REIT (formerly AIMS AMP Capital Industrial REIT.)

It has been overtaken by my investment in IREIT Global which used to be smaller in size.

IREIT Global is now my largest investment in a REIT as I added to my investment several times when Mr. Market went into a depression because of the COVID-19 pandemic and also due to rights issues to help the REIT fund acquisitions.

Just like AIMS APAC REIT, I believe IREIT Global to be well run.

Recently, for example, they were able to quickly fill up all 5 floors of a property which were being given up by an existing tenant. 

I also like that the REIT's insiders have a big stake in the REIT.

So, it is unlikely that they would do anything to hurt unitholders' interest.

See:
IREIT: Good time to buy now?




My second largest investment in a REIT and probably my oldest is AIMS APAC REIT.

Most institutional investors would gravitate towards bigger names with a pedigree such as Ascendas and Mapletree when it comes to industrial REITs.

However, I am a retiree and distribution yield is an important consideration as I am very much interested in cash flow but I try to be careful not to be blinded by high yields.

I have been invested in AIMS APAC REIT since the Global Financial Crisis and, looking back, it has been good to me as an investment for income.

Just like IREIT Global, insiders have a meaningful stake in AIMS APAC REIT and it is unlikely that Mr. George Wang would do anything to hurt unitholders' interest.

There is talk that ESR which has been gobbling up REITs in Singapore is planning to gobble up AIMS APAC REIT as well, having grown their stake in the REIT.

However, unlike ARA Logos, I doubt Mr. George Wang would consider a deal that is less than fair to AIMS APAC REIT if such a deal should ever be proposed.

See:

Should we invest in AIMS APAC REIT?

ESR-REIT gives ARA Logos short end of the stick?




My third largest investment in a REIT was Ascott REIT-BT and that was due to my earlier investment in Ascendas Hospitality Trust. 

As I expected the COVID-19 pandemic to have a rather long lasting impact on the hospitality sector, I decided to sell down my stake significantly some time back. 

For many months after that, I did not have a 3rd REIT which was greater than $100,000 in market value in my portfolio.

Of course, that changed when I significantly increased my investment in Sabana REIT after ESR's low ball offer to take over the REIT failed.

Sabana REIT is now my third largest investment in a REIT, making a comeback after many years of absence.

See:

Sabana REIT's lesson.

AA REIT, IREIT and Ascott REIT-BT.

AHT's investors getting a bad deal?




I do have investments in other REITs but my investments in IREIT Global, AIMS APAC REIT and Sabana REIT are my largest now, being the only ones which are above $100,000 in market value.

Together, I estimate that they generate a bit more than S$70,000 in passive income annually for me.

I have been saying for quite a while that I want a more resilient income generating portfolio and to be less reliant on REITs for income.

However, for income investors, REITs remain a relevant tool and this blog shows my continuing reliance on REITs for income.




Still, I like to think that I have a more resilient income generating portfolio now as I increased my investment in the local banks so that together they were at one time larger than my investments in IREIT Global and AIMS APAC REIT combined.

Since I increased my investment in IREIT Global due to its rights issues, my investment in the local banks together have become smaller than my investments in IREIT Global and AIMS APAC REIT combined but probably not by very much.

Anyway, I get the feeling that I could ramble on and, so, I should really end the blog.

Till the next blog, remember to stay vigilant and be socially responsible as we try not to give COVID-19 any room to grow.

Related posts:

1. Sabana and IREIT to the rescue.

2. Dividends from DBS, OCBC and UOB.

3. Largest REIT investments, April 2020.




18 comments:

garudadri said...

Dear AK
Nice as always to hear from you. I hold a reasonable amount in both AA REIT and IREIT as well although not as big as your stakes. Nevertheless, I have quite a sizable REITS portfolio yielding regular income despite the occasional nasty surprises which I faced with First and Lippo- real bad hits but lesson learnt. One of the reasons I spread out risk with no very big holdings
In the predicted inflationary environment, I do expect both banks as well as REITS to do well, the latter should be ok despite interest rate hikes as this would be accompanied by higher business activity
Sabana REIT is under my radar now with enticing yields but the price has run up to what I feel is fair value. The management has improved and their new but very small mall at NTP plus is doing brisk business- I live near that place
Might start nibbling as I do not expect major falls as of now
Regards
Garudadri

AK71 said...

Hi Garudadri,

Thanks for the scuttlebutt on NTP+. :D

I was very sure that Sabana REIT was worth much more than what ESR offered.

So, when the offer was rejected, thanks largely to the efforts of activist investors, I took a couple of big bites.

Fortunately, it has turned out to be pretty rewarding. :)

Cory said...

Hi AK, more than 100k for each stocks seem a very low base for you. The range too wide lah.

Cory

AK71 said...

Hi Cory,

I am shy. ;p

However, you have to agree that I am also consistent as I have never included any position with less than $100,000 in market value in my blogs on my largest investments. :)

Blur Sotong said...

Hi AK, thanks for updating us on your three big dividends machines. With regards to AIMS, what is your take that now after the uncertainty of the Australian Woolsworth purchase has been largely removed, the price has not recovered back to $1.6x? Do you forsee a small dip in the DPU due to them having to service the debt from the recent perpetual bonds? It was fortunate that at least the interest rates are secured in light of the likely interest rates hike in Q2 2022. Do you know of any possible catalysts for the price movement coming soon over the horizon? From what I understand, from the last update to now, you have added on more IREIT and interestingly not AIMS, why not AIMS since the price fell by quite a bit from $1.6x peaks while in contrast, IREIT price movement has just been stagnating around $0.6x for quite a while after their rights issue. It is only because IREIT had an irresistible rights issue which left little for AIMS? Comparing the two, I would still imagine AIMS to be a better buy than IREIT due to the fall of the former. I believe the dividends yield went up by 1+ % due to the fall in AIMS. Thanks for sharing with us your thoughts.

1 said...

Hi ak

Im looking to start building a dividend paying portfolio. Do you think anytime would be a good time to start putting money into reits or any stocks that pay dividends? Or would it be wise to let the market crash like 5-10% b4 considering thx.

john said...

With this quantum of $250k above, does it make sense to invest in the corporate bond e.g tuan sing bond at 6.9%?

AK71 said...

Hi Blur Sotong,

Thanks for the thoughtful comment.

I have published my reply to your comment in a blog. :)

See:
AIMS APAC REIT or IREIT Global?"

AK71 said...

Hi 1,

When to start investing for income?

Should we invest now or wait for a crash?

We hear these questions all the time.

I think you might find the following blogs interesting:
1. Wait for big crash to pick durians?
2. Good time to buy now or should I wait?

AK71 said...

Hi John,

When we buy bonds, we are lenders of money and not investors.

However, just like investing in a company, when we lend money to a company, we want to know what we are getting into.

For example, I once told readers that I would never lend money to Hyflux which meant that I would not buy its bonds even though the coupon looked pretty attractive at face value.

I cannot tell you if lending money to Tuan Sing is a good idea but you might want to read these blogs:
1. Invested in Tuan Sing Holdings.
2. Why have bonds in our portfolio and which ones?
3. Hyflux: $800 million bridge loan.

laurence said...

Wow, looks like pilgrims from afar seeking Oracle of Bonds might soon find their way here en masse!
0;)

AK71 said...

Hi Laurence,

I feel that if we are CPF members, making contributions and top ups to our CPF account should give us sufficient bond exposure unless we are very rich.

I am not an expert on bonds and could be wrong, of course. :)

References:
1. CPF is all we need unless we are very rich.
2. Insure against longevity risk but not like this.

VT said...

Hi Shifu,
With the recent news on MCT, can you "talk to yourself" on this spate of events? ;D

Thank you and Happy New Year!
VT

AK71 said...

Hi VT,

I don't have an interest in MCT or MNACT.

So, I won't be blogging about the proposed deal.

However, it reminded me a bit of the deal to marry ESR REIT and ARA Logos.

Feels to me that someone is getting the shorter end of the stick here. ;p

Reference:
ESR REIT gives ARA Logos the short end of the stick.

ngs said...

Hi, this info was from an article by SEEDLY on 17th Sep 2017.

Have you sold most of the shares at AIMS AMP REIT.
Quote:
Seedly went to pry further and here are some of the details of AK’s Investment Portfolio:

Investment Size:
$350,000 - $499,999 AIMS AMP Cap Ind'l REITs
$200,000 - $349,999 ACCORDIA Golf Trust
CROESUS Retail Trust
FIRST REIT
$100,000 - $199,999 ASCENDAS H-Trust
WILMAR Int'l
Centurion Corporation Limited
Unquote

AK71 said...

Hi ngs,

Oh my, that is such an old write up.

My investment in AA REIT and IREIT Global are almost equal in size with IREIT Global being a bit bigger.

No reason to reduce my investment in AA REIT.

patrol said...

Hi AK71,

I read from FifthPerson research that the gearing ratio for AA REIT is now 51%. Is that of any concern to you? I remember AA REIT is free for you now but hope you can talk to yourself while i eavesdrop.

Thank you!

AK71 said...

Hi patrol,

I have decided to publish my reply to your comment as a blog:
AIMS APAC REIT: Is gearing level too high?

AK is mental. ;p


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