HDB BTO projects delayed: What to do?

I know many readers are waiting for my blog on passive income received in 3Q 2021 but it is going to take a bit more time as there are quite a few things I would like to talk to myself about.

In the meantime, I am publishing a relatively short blog on delays in HDB BTO projects which might be of interest to some readers.

The COVID-19 pandemic and the subsequent Delta variant made life really difficult in more ways than one for many people. 

One of the consequences is the longer time it takes for construction work to be completed and this has, of course, affected the completion of HDB BTO projects as well.

Some people need their flats urgently and have decided to buy resale HDB flats instead of waiting for the completion of their HDB BTO flats. 

However, for those who are in less of a hurry, the wiser thing to do is probably to wait. 

The two big considerations would be 

1. financial cost 

and 

2. the leasehold nature of HDB flats. 

Readers who have been following my blog for a long time would know that this is a topic I have blogged about pretty frequently before.


BTO HDB flats, everything else being equal, are the most affordable form of housing in Singapore. 

I would have bought one myself if I could but I did not qualify for one. 

There are plenty of conspiracy theories out there about how the PAP government is out to rob us of our CPF savings by selling us 99 years leasehold HDB flats. 

It always amuses me to read or to hear stuff like that. 

These people are either misled or out to mislead. 

They are either misinformed or malicious.

A 99 years leasehold HDB BTO flat is a good quality housing option in Singapore if we are looking for a home to call our own till the day we die. 

Unless we have very strong reasons for buying a resale HDB flat, wait for a HDB BTO flat. 

Like many things in life, patience will be rewarded. 

If you are new to my blog, you might want to read the following blog which I shared with a reader who contacted me recently: 

When the lease on HDB flats end.

Related posts:

1. Why do I stay in a condo?

2. Not successful in SG unless...

"You mustn't tell people that. 

They will look down on you." 

AIMS APAC REIT to buy Woolworths' HQ.

It is confirmed. 

AIMS APAC REIT is going to buy Woolworths' HQ in Sydney. 

The price tag? 

Around S$454 million. 

This is going to increase the REIT's portfolio value by more than 26%.


As a long time investor of AIMS APAC REIT, I like the purchase for the following reasons: 

1. The asset will increase the number of freehold assets held by the REIT. 

2. The purchase will increase income visibility as there is a 10 years lease to Woolworths with annual rental escalation of 2.75%. 

3. There is room to build more rentable space as the asset's plot ratio has yet to be maxed out which will allow for more organic growth in the future (and this is probably a big push for the REIT to make the purchase if we look at their commendable record in maxing out plot ratios of some of their assets in Singapore.) 

4. The purchase is likely to be DPU accretive because it is going to be 60% financed by debt (which is likely to be competitively priced given the current low interest rate environment) and net proceeds raised from the recent S$250 million in perpetual bond issue will also be utilized.


A question on many unit holders' minds is probably will there be a rights issue? 

The REIT manager has said that they could issue new equity. 

Personally, I think that it is a forgone conclusion because when we compare the price tag of S$454 million and what we know in point number 4 above, there is a shortfall of some tens of millions of dollars. 

Equity issuance could take the form of private share placements or a rights issue, of course.


As a long time unit holder, I hope that any equity fund raising is going to be a rights issue. 

This is so that I can increase my investment in the REIT probably at a discounted price. 

After all, I never get invited to take part in private placements. 

I suppose I will just have to wait and see. 

Woolworths’ Full Year Result 26 Aug 21: Woolworths’ earnings led higher by Australian Food business.


References: 

1. AIMS APAC REIT and perpetuals. 

2. AA REIT: A private tour.