General S-REITs Discussion Thread

[DriftKing]

May I know when was the last period where the rates are higher before this eminent increase? Just to gauge how the REITS fared during those times.

 

[Shion]

S-Reits: Bigger and bolder over the years​

https://www.businesstimes.com.sg/real-estate/s-reits-bigger-and-bolder-over-the-years

 

[TehSi99]

Results unlikely to matter much (unless they are truly shocking) as market is forward looking. If interest rates continue to rise, the cost of borrowing is going to increase. This is where you have to DYODD and look at the debt profile of each REIT.

REITs will have 2 choices - refinance at a higher rate, or do a rights issue.

For REITS where the market price is above the NAV, it makes sense to do rights issue rather than borrow at a higher cost?

I only know gearing ratio. Besides that, anything else to look out for in interest rate rise perspective?

Thanks.

 

[Andrew833]

I only know gearing ratio. Besides that, anything else to look out for in interest rate rise perspective?

Thanks.

Debts and debts maturity

 

[yumsang]

after almost 2 years, only flct met my target
the others still at square one

 

[limster]

Debts and debts maturity

Its all in the financial statements. When you see how much debt they have, its easy to calculate what happens if they have to rollover their debt at 1% higher interest rate for example.

Interest payments are part of expenses and will nett off your dpu so you can already model the impact of interest rate on dpu (assuming all other things are equal).

One thing I am not sure off is whether the REITs indicate how much of their debt is fixed rate or floating rate. I presume most debt is fixed rate as REITs will surely want to lock in low interest rates. If there are REITs out there with a lot of floating rate debt, then interest rate impact will be even higher. (and also suggests that the REIT managers are not very good - why didn't they lock in low fixed rates when they had the chance?)

 

[TehSi99]

after almost 2 years, only flct met my target
the others still at square one

Square one is better than in red. At least take dividends first.

Reits has been going down recently.

 

[Andrew833]

Its all in the financial statements. When you see how much debt they have, its easy to calculate what happens if they have to rollover their debt at 1% higher interest rate for example.

Interest payments are part of expenses and will nett off your dpu so you can already model the impact of interest rate on dpu (assuming all other things are equal).

One thing I am not sure off is whether the REITs indicate how much of their debt is fixed rate or floating rate. I presume most debt is fixed rate as REITs will surely want to lock in low interest rates. If there are REITs out there with a lot of floating rate debt, then interest rate impact will be even higher. (and also suggests that the REIT managers are not very good - why didn't they lock in low fixed rates when they had the chance?)

Most debts are from fixed rate, few from perpetual securities.
Looking at CICT, debts will mature 2022 13% and 2023 16%. That's is 29%! High chance interest rate will increase.
Look at Mapletree, their debts maturity are the best.

 

[dappermen]

But when matured, then they will Surely take on new/more debts again at prevailing mkt rates (much higher)

 

[dappermen]

20yrs since it 1st started in sg ... 2021 is weaker iedge Sreits compared to STI only 3 outperformed STI
i only own1 out of the listed
I dont wanna healthcare or hospitality or pure offices!!!!!!! & dislike Starhill

Dont worry All the top 5 big names r usually NOT in ....

 

[limster]

Most debts are from fixed rate, few from perpetual securities.
Looking at CICT, debts will mature 2022 13% and 2023 16%. That's is 29%! High chance interest rate will increase.
Look at Mapletree, their debts maturity are the best.

perpetual securities are considered equities not debt, so they do not need to be reported as debt. In a sense thats correct but investors should always be aware of how much perpetual securities the company has issued.

Furthermore they don't have to worry about refinancing at a higher rate, and they don't have to return the principal unless they want to.

 

[Andrew833]

perpetual securities are considered equities not debt, so they do not need to be reported as debt. In a sense thats correct but investors should always be aware of how much perpetual securities the company has issued.

Furthermore they don't have to worry about refinancing at a higher rate, and they don't have to return the principal unless they want to.

Still considered debts just hidden away from investors as it's did not appear in the gearing ratio.

 

[dappermen]

nt similar yet comparing??? but 4 sure FLCT is better if u thk developed ctries will b growing after the pandemic
SE/Asia - focused? : MLT

 

[yumsang]

thought of selling CLCT and buy NVDA or MSFT ... is it a bad move?

 

[Andrew833]

thought of selling CLCT and buy NVDA or MSFT ... is it a bad move?

CLCT is dividend stock and current price very low.
MSFT still uptrend.
NVDA just big drop from ATH, better think twice.

 

[TehSi99]

Anyone expecting Reits prices to go lower when interest rates rises?

 

[revhappy]

Anyone expecting Reits prices to go lower when interest rates rises?

It should all be priced in by now. I wonder what happened to the great reopening trade?

 

[Andrew833]

Anyone expecting Reits prices to go lower when interest rates rises?

Some of the REITs already price in (those drop alot recently).
Some REITs with bad debts management likely to be affected, when the interest rate really go up.

 

[ctan84]

Some of the REITs already price in (those drop alot recently).
Some REITs with bad debts management likely to be affected, when the interest rate really go up.

Any egs of those with bad debts management?

 

[Andrew833]

Any egs of those with bad debts management?

Just give a few example, didn't study much, just base on data provide by Vince.
Dasin Retail Trust
Gearing ratio 36.7%
Fix Rate 24.1% (interest rate will be higher when taking new loan)(same as our property loan fix rate better in the high inflation period)

ARA US Hopsitality
Gearing ratio 48.4% (max 50%)
Fix Rate 76.6%

Suntec
Gearing ratio 44.3%
Fix Rate 57%
(debts mostly mature after 5 years so not so bad)

Elite Commercial
Gearing ratio 42.1%
Fix Rate 63%

IREIT Global
Gearing ratio 35.8%
Fix Rate 25.3%

Mapletree has the best debts management.