This was a recent chat with a reader on some aspects of REITs:
- F
AK, i read your S-REITs postings and your aims amp reit
- and the decline in SG economy
- 6:21pm
Affect their unit price or affect their operations? Ask yourself.
What do you mean by conservative outlook for industrial sector?
Decline in Singapore economy? Like how?
- 6:35pm
What is optimum capacity of rentals?
- 6:36pm
that is maximum occupation
ok, I am beginning to understand your question
- 6:37pm
nope
- 6:38pm
I didn't say that either
- 6:40pm
If you own a store that sells mee Siam and let us say you have a capacity to cook 1000 plates a day. And you sell out every single day because you sell at $1 a plate. Are you optimising profits when a price consumers are willing to pay is $2 a plate?
- 6:41pm
Wouldn't it be better to sell at $2 a plate and maybe just sell 800 plates a day?
- 6:42pm
Of course. smile emoticon
It is never as simple as a matter of achieving full occupancy means optimum performance. That is the point I am making.
maximum occupancy might not mean optimum performance
- 6:52pm
I will leave them to do their jobs. So far, they have performed very well and I hope they continue to deliver. Our job as investors is to monitor and as long as the investment performs to our satisfaction, that is good enough reason to stay invested. What is good enough will depend on what we want out of an investment.
- 6:53pm
If you don't feel comfortable enough to be invested, it is best to stay out.
- 6:54pm
I will leave the speculation to the speculators.
I don't always talk to myself, you know?
Related posts:
1. AIMS AMP Capital Industrial REIT: An opinion.
2. 6M 2015 passive income from S-REITs.