Posts
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!
Recently published:
Most important investment idea?
Most important investment idea?
Reference:
Why AA REIT?
Why AA REIT?
Bloggy Award