Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...
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When it comes to AA REIT's unit price, I can only say that Mr. Market will do what it wants to do.
I do not know why the unit price is where it is but I do know that AA REIT should continue to generate stable income for me.
If there is a dip in DPU, it is probably going to be temporary, everything else being equal.
In the grand scheme of things, over a longer period of time, inflation should see prices including asking rent going up.
As an investor for income, I do not usually invest in REITs for a few months only or even for just a couple of years unless I find out it was a mistake which has not been the case for AA REIT.
Why did I add to my investment in IREIT Global and not AA REIT?
You are right in your suggestion that it was due to IREIT Global's rights issues and the fact that my resources are limited.
Also, I want to add that price is not the same as value.
At $1.60 a unit, AA REIT was trading at a big premium to NAV but its unit price has retraced to a level that is closer to its NAV which means it is a better time to buy now than it was before.
However, IREIT Global is still trading at a pretty big discount to its NAV which helps to make it a more compelling buy.
Warren Buffett famously said that whether socks or stocks, he likes buying quality merchandise when it is marked down.
When we take into consideration that IREIT Global holds freehold assets while many of AA REIT's assets are in Singapore with relatively short land leases, the value that IREIT Global brings to the table now shines brighter.
Having said this, it is important to bear in mind that AA REIT and IREIT Global might both own buildings but they are in different sectors.
They are also in different parts of the world.
Not putting all our eggs in one basket is probably a good idea.
Of course, AK is just talking to himself here and, depending on our motivations, it might or might not be relevant to us.
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.
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.
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.
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.
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.
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