AIMS AMP Capital Industrial REIT: Accumulate on weakness.

I bought more units of AIMS AMP Capital Industrial REIT today at 93.5c. 

Price touched a low of 93c on relatively high volume today. In the following days, if selling pressure does not let up, we could see the next support at 92c tested. That would bring us back to price levels not seen since December 2009.

Although the MFI and Stochastics both suggest that the REIT is terribly oversold, in very bearish circumstances, price could continue to drift lower with momentum oscillators remaining in their oversold territories.

If price should go lower to test 92c, I would like to see the MACD forming a higher low. This would hint that downside momentum has weakened. It would also give us a positive divergence.

The redevelopment of 20 Gul Way is NPI yield accretive and because it is funded fully by debt, it is also DPU accretive. It is estimated that contributions from the redevelopment will start from 1Q 2013. 

By early 2014 when both phases of the redevelopment are generating revenue, the management expects a positive DPU impact of +1.465c, everything remaining equal. This would mean a pro forma DPU of 11.465c or a distribution yield of 12.26% based on today's closing price of 93.5c per unit.

We could see continuing weakness in the REIT's unit price if sentiments remain bearish. I would capitalise on further weakness to accumulate as I could find nothing wrong with the REIT's fundamentals.

See slides presentation regarding progress in the redevelopment of 20 Gul Way: click here.

2011 full year passive income from S-REITs.

On 7 Dec, income distribution from AIMS AMP Capital Industrial REIT was received. It was also the final income distribution to be received from my portfolio of S-REITs this year.

Total income distribution received in 4Q 2011:
S$ 29,040.65.

Add this to S$ 75,785.49 received in the first three quarters of 2011, the grand total for the year 2011 is S$ 104,826.14.

I received more income this quarter because I made use of the weakness in the stock market to accumulate more units in selected S-REITs.

I have imperfect knowledge definitely and I can only try to do the best with what I know. I don't spend time asking questions which I cannot reasonably find answers for.

As many may already know, it was after much deliberation that I decided to share in dollar terms the passive income I am receiving from my investments in S-REITs. From the flood of comments I received in my last blog post on the subject, I guess readers do appreciate this candid sharing.

However, I doubt such a blog post serves any other purpose than to show what is achievable if we put our minds to it. The message is really simple and it is meant to inspire.

So, don't be surprised if I do not do another blog post like this in 2012 since I do not believe it would be more useful than this or its predecessors.

Once again, if you need a little encouragement, remember, if AK71 can do it, so can you! Bookmark this page if you think it helps. Add oil!

Related post:
$120k annual passive income from S-REITs next?