Wednesday, November 17, 2010

Loaded Parkway Life REIT, CACHE Logistics Trust and First Ship Lease

In my previous post, I said that medical counters will be my new acquisition targets. Yesterday, I decided to load up on Parkway Life REIT. Besides that, I also increase my stake in First Ship Lease (FSL) and CACHE Logistics Trust (CLT).

This post will focus on CLT and Parkway Life REIT.



CACHE Logistics Trust:

I loaded 1 lot of CLT at $0.96 because

1) The warehouses under CLT are not those conventional ones. CLT's warehouses are custom-built and sophisticated, catering to the needs of its tenants who are mainly multi-national corporations. Therefore, the demand for CLT's facilities will remain strong. These warehouses are also strategically located near to the airport.

 
CWT Commodity Hub – the largest warehouse in Singapore and one of the largest in Southeast Asia

CWT Cold Hub – the first and only ramp-up cold storage warehouse and one of the largest and newest cold storage facilities in Singapore

Schenker Megahub – the largest freight and logistics property located at the Airport Logistics Park of Singapore

Hi-Speed Logistics Centre – a modern, highly functional logistics facility located at the Airport Logistics Park of Singapore

C&P Changi Districentre – a modern ramp-up warehouse facility boasting excellent specifications and the one of only two ramp-up warehouses in Changi International LogisPark (South)

C&P Changi Districentre 2 – a highly functional cargo lift logistics facility located within the Changi International LogisPark (South)




2) At the current price, the yield is between 7% to 8%. Compared to other industrial/logistics REITs, the yield seems more attractive for me. However, CLT will only distribute 100% of its cash in 2010 and 2011. The distribution per unit might drop to 90% in 2012, thus decreasing the yield. Therefore, I will not add more CLT if the price is more than $0.96


3) CLT is managed by ARA which has a strong track record managing Suntec REIT. CLT also has a reliable parent in the form of CWT which specialises in logistics warehouses.




Parkway Life REIT:

I loaded 1 lot of Parkway Life REIT at $1.62 because......

1) Singapore has a rapidly aging population. People will need more medical facilities and nursing homes. As a result, the occupancy rates at hospitals will be close to 100%. Furthermore, the medical and health business in Singapore will continue to prosper as more wealthy medical tourists in the SEA region seek medical services here. The supporting evidence can be found in the links below.


The Coming Silver Tsunami < Click 



2) To further diversify my REIT portfolio. I have retail, office and industrial/logistics REITs. Therefore, a medical/hospital REIT will strengthen my portfolio. 


3) Even if the market undergoes a correction, medical counters will not fall that much because people will still need to visit the doctor when they are ill. 


My next target will be First REIT. The price will most probably drop after its rights issue.




Please leave your comments below :)




Dividends Warrior,
Peace Out

6 comments:

风隐 said...

I also feel medical counters are good choice as the outlook is bright, especially for local. The demand is there.
But the market valuation is already no longer cheap.. not planning to invest for now

Dividends Warrior said...

Hi 风隐,

Thanks for the comment.

Yup. I agree the market valuation for medical counters are rather high.

However, First REIT is still offering decent yield. I will wait for post-rights when the price drops.

income investor said...

D.W., a very good blog you have, keep it up !! :=)


Best regards,
Passive Returns

Dividends Warrior said...

Hi Passive Returns,

Thanks for the compliment! :)

All the best in your investment journey too.

Shawn said...

Hi D.W

Can you share how you get so much cash to invest within 2 months of time?

albina N muro said...

The warehouses under CLT are not those conventional ones. CLT's warehouses are custom-built and sophisticated, catering to the needs of its tenants who are mainly multi-national corporations. palletline depots

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