DevilPlate
Arch-Supremacy Member
- Joined
- Nov 22, 2020
- Messages
- 12,222
- Reaction score
- 5,149
In any case, 2y fixed at 2.9% is a damn good deal imo.
Sora need to drop like 1.5- 2% hahaha
General S-REITs Discussion Thread
- Thread starter Dividends Warrior
- Start date
Sora need to drop like 1.5- 2% hahaha
Yah 2.9% is good. I couldn't get that rate coz my outstanding loan amount isn't high enough for that. Haizz could only get 3.15% but with 1 yr re-pricing option.
Already vested since last year and recently when it dip below $1. Basically open up SGX website tab REIT, Business Trust almost half of them I have. 100 units per trade really very affordable except the blue chip counter which I insist to wait for 52 week low. If I get my mid year bonus think don't wanna wait liao as long price close to 52 week low can queue liao.
What's their dividend like uncle? I'm usually quite skeptical of India's stuff. Rather buy China than India.
The word CapitalLand (rumors claim got govt links etc) can lah very strong. Dividends will depend how you interpret as good. Some ppl no 6% no talk. Some humble get 4% contented liao. China or India as long no close shop got dividends and capital gains why so particular? For US angmo then particular hehehe.
"Keppel" also similar rumours, but in the end kanna orkong jiat lat jiat lat for corruption leh.
Do you know there is this phrase left hand go to right hand? The monies no matter or kong or what go one big round still inside within the entity itself. Of cuz exist ppl say conspiracy theories no evidence. If you scare can don't buy it is not mandatory. It is an option.
Seems like quite a bit of support at $1. Still waiting to buy more under $1.
I'm not particularly interested in any other S-reits, maybe because my position size for other REITs is big enough, don't want to add more unless there is a super cheap sale.
There are so many earlier posts to youtubers like Adam Khoo talking about buying REITs, this is just another addition to the chorus.
I think there is consensus that when interest rates fall, REITs are likely to rally. However, when interest rates fall, I think MSCI world is going to rally as well, and I am not sure that the SG-REIT index can outperform MSCI World.
Hedge your bets and keep on buying World ETF, and selected good SG REITs
I think there is consensus that when interest rates fall, REITs are likely to rally. However, when interest rates fall, I think MSCI world is going to rally as well, and I am not sure that the SG-REIT index can outperform MSCI World.
Hedge your bets and keep on buying World ETF, and selected good SG REITs
Buy reits call has started since end of last year. Since then, all saying peak of interest rate hike. Now continue the same call.
When interest rate falls, reits may rally but actual results may still be affected by the high interest rates that are still on-going with banks until the next refinancing.
World ETF is basically US centric. It has never been "world" so as to speak in my dictionary. So monitor the US markets will indicate the world ETF rise or fall. I learnt it the hard way when Japan meteoric rise does not transform into corresponding big increase in world ETF.
philips107
Senior Member
- Joined
- Nov 17, 2002
- Messages
- 816
- Reaction score
- 552
Like what TehSi99 and limster has said, the buy call is on the premise that interest rates has peaked and will drop, and economy does not crash.
As no one can predict the future rates and economy, if the premise turns out wrong, u will get burnt by the buy call.
For MLT,
1. I disagree with what the vid said that MLT's interest costs have peaked. It is too simplistic a view.
From MLT's own slides, slide 30 : https://links.sgx.com/FileOpen/20240429-MLT_PPT_4QFY2324_final.ashx?App=Announcement&FileID=801060
'The Manager anticipates that replacement loans and hedges will be at significantly higher than existing rates.'
My understanding is the previous cheap loans will be renewed at current higher rates. Even if rates were to fall in the future, it may still be higher than the low rates they enjoyed previously.
2. Vid did not study slide 34.
The green bars representing CN lease renewals are the tallest for the next 3 years, at almost 1/2 of all renewals next FY, and about 1/3 for the subsequent 2 FYs. These CN renewals are currently negative.
I feel the recent price fall is not explained by the annouced small DPU drop. I suspect market is pricing worse is yet to come.
one thing I have learnt is that many times, the stock price has already priced in what is to come based on the finances. Of course, there are times when stock price is undervalued or over-reacted on bad news.
As far as I am aware, banks priced the SGD loans against SORA + margin. In the past, most would have hedged the SORA/SIBOR with interest rate swaps, which is why the MLT quarter-on-quarter effective rate can remain the same for as long as there are no expiring swaps. But once the swaps run out, the current SORA or other benchmark rates will kick in and push the rates up.
For new loans. If everyone believes that the rate is peaking now and leaves the new ones unhedged, then if SORA suddenly drops to the 2020 level, the effective interest rate will definitely fall. In fact, when SORA is below 1%, the lenders might want a 1.5% margin, but when SORA is so high at 3.5%++, they might be willing to further compress and lower than 1.5% margin/spread because their cost of funds does not move linearly, there are still a lot of people keeping money in accounts which pay little or no interest despite the banks being able to lend at higher rates.
Most of the REITs' loans are short-term, ranging from 3 to 5 years, because they never pay down the principal. As of today, I don't see the market pricing a very low-interest rate environment over the next 3-5 years. The current 6-month T-bill is 3.7%, while 2-year and 5-year rates are 3.5% and 3.4%, respectively. Assuming SORA tracks the direction of the government bond rate, a 5-year swap will still be priced at around 3%++.
Depending on the asset types and classes, some might enjoy better rental escalation, which may, to a certain extent, cover the higher interest cost. E.g. a 1 billion property portfolio having a Cap rate of 6% bringing in 60mil net operating income, if it is geared to 40%, for every 1% increase in rate, the 400mil loan will need to pay 4mil more interest, if the rents can escalate by 10% bringing the 60mil income to at least 64mil, it can probably cover the additional interest payment.
FLCT - bought at $0.99.
Next, I must buy more World ETF! (everytime I buy SREIT, I must buy World ETF to balance out....
)
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ Forums. Forum members and moderators are responsible for their own posts.
Please refer to our Community Guidelines and Standards and Terms and Conditions for more information.
