General S-REITs Discussion Thread

[TehSi99]

I would say buy the wrong thing rather than wrong timing. Just like those who bought sembcorp marine instead of apple. If buy wrong project, then simi timing also useless.
As investor, u need to be ready for all timing. Warren Buffet also can make money/ lose money in bull/ bear market. Quite common also. I believe property investors also same thing

Timing also means patience.

Sometimes, you can only have very few good chances to put your money into a stock that you are eyeing over a period of time.

 

[yumsang]

waiting very patiently

 

[hoks]

U all disappointed wif the results over the last couple of days? So many dropped their distribution cf a yr ago.

 

[weng0202]

I guess it's expected because of the rising interest rates.

U all disappointed wif the results over the last couple of days? So many dropped their distribution cf a yr ago.

 

[TehSi99]

I guess it's expected because of the rising interest rates.

Cost of operation increase more than rental reversion.

PBV ratio also normalise now relative to DPU.

 

[hoks]

I guess it's expected because of the rising interest rates.

Yeah. Those wif overseas properties also blamed on exchange rate.

Thought reopening n high rental revision will increase distribution, I am so wrong...

 

[TehSi99]

Yeah. Those wif overseas properties also blamed on exchange rate.

Thought reopening n high rental revision will increase distribution, I am so wrong...

But just how long the crappy exchange rate will last.

 

[Foxcraft]

Good day everybody,

I am looking to get into dividend investing in Singapore.

From what I have researched thus far, this is accomplished through investing in bank stocks and investment trusts.

However, I have a few questions that I hope to seek your advice on:

1) Should preferential offerings be welcomed as they are usually used for DPU accretive investments although they dilute unitholders?

2) Should Singaporean investors choose only the safest sponsors like Capitaland/Mapletree to reduce risk?

3) Is Capitaland Investment Limited sufficient to gain exposure of all of Capitaland's REITs? Or are they are simply two different investment vehicles?

4) Should the dividend seeking investor buy the STI index as there is already a heavy weightage in banks and Reits?

I appreciate your responses. Thank you.

 

[snowcrabramyeon]

1) Should preferential offerings be welcomed as they are usually used for DPU accretive investments although they dilute unitholders?

I think we need to be clear what we mean by “dilute”. “Dilute” could mean that the unitholders’ proportion of shares vs the overall number has dropped slightly. But then, why should retail investors care if they are not interested in running the company? “Dilute” could also mean that the DPU has dropped (ie, same earnings but distributed over more units). Retail investors would mostly pay attention to this factor. But then, if the acquisition is indeed DPU accretive, it should mean that the DPU for each unitholder should increase whether or not the unitholder subscribes to the shares offered.

Most retail investors only care for the milk (ie, the DPU) and would not want to bother with raising the cow (running the company).

 

[Foxcraft]

I think we need to be clear what we mean by “dilute”. “Dilute” could mean that the unitholders’ proportion of shares vs the overall number has dropped slightly. But then, why should retail investors care if they are not interested in running the company? “Dilute” could also mean that the DPU has dropped (ie, same earnings but distributed over more units). Retail investors would mostly pay attention to this factor. But then, if the acquisition is indeed DPU accretive, it should mean that the DPU for each unitholder should increase whether or not the unitholder subscribes to the shares offered.

Most retail investors only care for the milk (ie, the DPU) and would not want to bother with raising the cow (running the company).

Thanks for the clarification, basically it's just part of the business.

 

[limster]

1) Should preferential offerings be welcomed as they are usually used for DPU accretive investments although they dilute unitholders?

As part of your research, you should analyse the REITs previous preferential offerings/rights issue to see whether they are DPU accretive or not. As you imply in (1), some are DPU accretive, some are not.

You should also check whether the manager has a history of issuing private placement to BB at a discount.

 

[waxqube]

Good day everybody,

I am looking to get into dividend investing in Singapore.

From what I have researched thus far, this is accomplished through investing in bank stocks and investment trusts.

However, I have a few questions that I hope to seek your advice on:

1) Should preferential offerings be welcomed as they are usually used for DPU accretive investments although they dilute unitholders?

2) Should Singaporean investors choose only the safest sponsors like Capitaland/Mapletree to reduce risk?

3) Is Capitaland Investment Limited sufficient to gain exposure of all of Capitaland's REITs? Or are they are simply two different investment vehicles?

4) Should the dividend seeking investor buy the STI index as there is already a heavy weightage in banks and Reits?

I appreciate your responses. Thank you.

1) Preferential offerings to all existing unitholders will not dilute you if you subscribe to it since your percentage share in the company remains the same. However, each offering needs to be evaluated separately. It's not always good

2) How do you define "safe"? And what risk is this referring to? The "safe" sponsors also have REITs with foreign assets, that will increase risk for Singaporean investors who spend SGD

3) Asset manager and REITs have different incentives. The REITs income to CLI is also taxed whereas it is tax-free if you buy the REITs directly

4) Technically STI is not a dividend yield focused index. Also are you sure you want to concentrate your holdings in banks? Singapore banks are strong but banks are still highly leveraged businesses.

 

[homer123]

Ho Ching recommendation to foreigners, buy S-REIT instead of Spore residential property in her facebook



Extract from Ho Ching post :[Afternote:
Above corrected from earlier info on joint ownership for a married couple, and the ABSD on a 2nd jointly owned property.]
And of course, ABSD only applies to residential properties. There is no ABSD for commercial properties etc.
Plus, there are now over 30+ S-REITs for interested investors to get exposure to various kinds of properties for investment, without having to go buy single chunky assets, which could be hard to dispose when we need to cash.
The S-REITs in this environment yield anywhere from 4% for more conservatively managed portfolios, to over 10% for the higher risk portfolios.
The S-REITs don’t require huge amounts of money to start. And we can buy an ETF on S-REITs too to diversify single S-REIT manager risks.
S-REITs were first conceived and developed as a way for ordinary mom and pop retail and small investors to have digestible access to a chunky asset class of properties. It is a way for folks to invest in a well regulated, relatively stable and easily understood asset in bite sizes of 1000 units. Overseas folks are most welcome to invest in other productive segments of the economy, with residential properties largely meant to be homes for people to stay as owner occupiers.
Hence, foreign buyers are subject to a hefty ABSD of 60%, doubling the earlier rate of 30%.
This hefty jump must mean that MAS must already be seeing increasing flows into the residential property market post pandemic, and hence, the quick preemptive cooling measure, esp in the light of various macro global trends.
So foreigners still interested in property assets can invest in S-REITs or S-REIT ETFs as an alternative to crowding into the residential home market in tiny Sg
At the same time, foreign buyers can also have access to a more liquid asset underpinned by an easily understood and well diversified asset like property. In this way, they don’t need to park their emergency savings into a single property, and find it difficult to sell and monetise that one chunky asset precisely during emergencies when markets may dry up.

 

[TehSi99]

See if ppl chiong to buy Reits.

 

[Jay6789]

Thank you ah ho for promoting S-REITS

 

[yumsang]

lasted for 3 minutes

 

[Foxcraft]

1) Preferential offerings to all existing unitholders will not dilute you if you subscribe to it since your percentage share in the company remains the same. However, each offering needs to be evaluated separately. It's not always good

2) How do you define "safe"? And what risk is this referring to? The "safe" sponsors also have REITs with foreign assets, that will increase risk for Singaporean investors who spend SGD

3) Asset manager and REITs have different incentives. The REITs income to CLI is also taxed whereas it is tax-free if you buy the REITs directly

4) Technically STI is not a dividend yield focused index. Also are you sure you want to concentrate your holdings in banks? Singapore banks are strong but banks are still highly leveraged businesses.

1) Understood.

2) For this instance, I defined safe being the reputation of the sponsor behind the REITs. As Capitaland and Mapletree are fully owned by Temasek, which is AAA rated, I believe they have a good line of credit during bad times. Thanks for bringing up the currency/political risks of certain REITs. I will consider that in my investment.

3) Thanks for the clarification.

4) I did not consider the leverage that Singapore banks have. Upon reading their financial statements again, they do have high debt to equity ratios. I was likely biased towards them due to their reputation in Singapore. Thanks for pointing that out. My initial reasoning for investing in local banks is due to their exposure to developing countries in Asia.

Don't mind if I ask, but are there any geographically diversified REITs with an exposure to the Asia?

Based on my preliminary research, Mapletree Pan Asia Commercial Trust, Mapletree Logistics Trust and First REIT fits these requirements.

I appreciate all replies from all forum users.

 

[weng0202]

Thank you ah ho for promoting S-REITS

I don't quite buy in for this S reit etf. Need to pay transaction fees when buying and still need to pay yearly management fees. I think I buy and make a list of good reits on my own better. No management fees required.

 

[limster]

I don't quite buy in for this S reit etf. Need to pay transaction fees when buying and still need to pay yearly management fees. I think I buy and make a list of good reits on my own better. No management fees required.

can also subscribe to excess rights.

 

[weng0202]

can also subscribe to excess rights.

Yeah, more control on our part. Why pay yearly management fees for something that I can do on my own.