AIMS AMP Capital Industrial REIT: 1Q FY2013.

DPU is 2.5c, 0.2c lower than in the last quarter. This is within expectation. Some might remember when a reader was elated that the REIT was paying 0.1c more in DPU per quarter culminating in 2.7c in the last quarter, I mentioned that it would probably not be repeated in this quarter.

The REIT will go XD on 31 July and income distribution is payable on 18 September.  With unit price at $1.30 or so, we are looking at a distribution yield of 7.69%, annualising the 2.5c DPU for the quarter (representing 97.7% of its income available for distribution). However, we are likely to see income improving towards year end and the REIT is likely to pay out all of its income available for distribution in Q4. So, the distribution yield for the whole year could be a bit higher, everything else remaining constant.

NAV/unit: S$1.40

Gearing: 29.7%

Interest coverage ratio: 6.0x

Occupancy: 99.1%

Weighted land lease expiry: 41.8 years

Average security deposit: 7.2 months

The management is actively managing the REIT's lease expiry risk and has made good progress since the last quarterly report. If it continues with the positive momentum, we could see more positive rental reversions and this could be DPU accretive.

Of the REIT's total debt of $279.4m, $113.6m is maturing in October 2013. I would like to see the REIT's manager getting this out of the way with a longer 5 years term loan instead of the usual 3 years. Of course, it makes sense to do so as it locks in a lower cost of capital in the current low interest rate environment. It will bolster investor confidence in the REIT.

For anyone investing for income and thinking to continue doing so for another few years at least, the REIT's DPU is likely to increase some 15% by end of 2013. This is very attractive and probably explains why the REIT's unit price has been on a steady climb upwards in recent weeks.

People ask if they should sell now and buy lower at a later date. People also ask me if they should buy now anyway as price could continue to go higher with expectations of a higher DPU in the coming quarters.

Answer:
I would not tell you what to do (surprise, surprise). I would share with you what I am doing: nothing. What investment I have in the REIT now is part of a core portfolio for income. Whatever I bought to trade for capital gains, I have already sold. If the REIT's unit price should weaken significantly, I would buy again. If its unit price should strengthen more significantly as to compress distribution yield by much more, then, I would consider further divestment. Now, I am keeping the status quo.

See presentation slides: here.

Related posts:
1. AIMS AMP Capital Industrial REIT: 4Q FY2012.
2. AIMS AMP Capital Industrial REIT: Making money.

Tea with AK71: Soup Restaurant's S-Card.

Yeah! After weeks of waiting, I have received my S-Card from Soup Restaurant.

Some might remember that before I was a shareholder of Soup Restaurant, I blogged about how I chose to invest in Old Chang Kee instead of Soup Restaurant. That decision has turned out quite well.

Not too long ago, I explained my more recent decision to invest in Soup Restaurant. Well, it remains to be seen if my decision would bear fruit.

In the meantime, I will enjoy a discount off my bills on my periodic visits to Soup Restaurant's outlets. Yummy!

Related posts:
1. Old Chang Kee: Initiated a long position at 26c.
2. Soup Restaurant: Gain of $7.7m.