IREIT: What is a more realistic distribution yield now?

A reader who attended last Saturday's event sent me an email asking me about IREIT Global because he got in during its IPO and he is now worried after hearing what I had to say. 

I was puzzled because I asked if anyone was invested in the REIT on Saturday but there was no indication that anyone was.

Anyway, for those who are interested, I did not say anything new last Saturday. 

Please see related post at the end of this blog. 





Basically, I again explained why I avoided investing in IREIT Global when they had their IPO middle of last year.

I also said that people who invested in the REIT because of the expected 8% distribution yield would probably be disappointed. 

So, what is the expected yield now?

The Euro has been in a downtrend against the S$. 

Today, the exchange rate is one Euro to S$1.54 which is much lower than it was middle of last year at S$1.70.





Based on the estimated income available for distribution to unit holders of Euro 8.3 million (6 months) and approximately 419 million units in issue, annualising the DPU in S$ terms now gives us a distribution yield of about 6.8%.

IREIT Global's unit price has retreated since hitting a high of 90.5c a unit.

Will IREIT Global's unit price go much lower? 

It looks like it could, especially if Mr. Market still demands an 8% distribution yield.

What? Take a stab in the dark? 

Er, well, if the annualised DPU is 6.1c, to get an 8% yield, the REIT would have to trade at 75c a unit which is some 15% lower than its IPO price of 88c a unit.





Related post:
IREIT Global: Distribution yield of 8% safe?

Suddenly, financial freedom looks less remote!

Blogging about my meals has had positive consequences both for me and some readers.

1. There are people who care enough to write to me to tell me I don't eat enough vegetables. So, I have been making a conscious effort to incorporate vegetables in my diet more regularly, thanks to their nagging. What did I have for dinner this evening?

Non-fried noodles. Broccoli. MSG free soup cube.

Add mom's secret ingredients plus a mug of genmaicha.

2. Some readers have informed me that I have inspired them to pack lunch to work and to have dinner at home more often instead of going to the restaurants. Some of them actually realised substantial savings especially when they managed to get the whole family to participate. 

Like with many things, it gets easier with time as is the case for a lady who told me her husband is now a firm believer in the changes she has made to their lifestyle because of the resulting savings he sees accumulating in their bank account.

Their wealth is growing more rapidly now, month after month, and this gives them a greater sense of financial well-being. This is an achievement. 

I feel happy for them.

Through sharing very personal information such as how much I receive in terms of passive income, how much I have in my CPF-OA and SA, how I am able to get free health insurance in Singapore and how I save money on a daily basis, just to name a few things, I have found that it is easier to convince people, to inspire people to take their first step on the journey towards financial security and, ultimately, financial freedom. 

Suddenly, it is not just something people talk about. 

Suddenly, it looks more achievable. 

Suddenly, it does not look so remote.






It has been a 20 years journey for me but, hey, if AK can do it, so can you, right?

Some might take a shorter time. 

Some might take a longer time. 

It doesn't really matter, does it?

I know some people might ridicule me for blogging about my meals but I am sure regular readers are able look beyond the facade. 

Regular readers know that my journey towards financial freedom is anchored upon a philosophy and that philosophy is apparent in my daily life.




Updated on 2 July 16:

Related post:
How to recession proof your life?