Tuesday, September 18, 2018

Dividend Warrior's Old Blog Posts from 2012 to 2014 Re-uploaded

Sometimes, a short walk down memory lane is all it takes to appreciate where you are today. It is humbling to relive those investment mistakes, small and big. To remind myself never to be over-confident in my investment decisions. For new readers, this is an opportunity to get to know Dividend Warrior as an investment newbie. Nostalgia overload!  

2012 Posts
2013 Posts
2014 Posts


Sunday, September 16, 2018

Tracking The Multi-Year Performance of REITs

As I stated in my previous post, I tracked the multi-year performance of my vested REITs in an excel sheet based on various quantitative factors. Below is my template for tracking one of the many metrics, 'DPU growth'. I tweaked the table a bit by adding another column to track the number of times the DPU registered a year-on-year decline. 




Did a tabulation on the 5-year DPU growth track record of my vested REITs. I left out FLT & KDC because their DPU histories are short. Numerous crisis had occurred since 2012. But most of these REITs have done a commendable job of growing DPU consistently till now. If I take their price appreciation into consideration, the total returns would be even better. They are ranked in terms of DPU growth. AREIT, FCT, MCT, MNACT, MINT & PLife have a pristine record of growing DPU  over the last 6 years with no pause!

Proof that time in market is better than timing the market. Power of CD! :)


Friday, September 7, 2018

Sustainable Competitive Advantage Between REITs

The Impregnable Mapletree Fortress!

The ‘moat’ of a REIT can be categorized into quantitative and qualitative factors. Most investors would be familiar with the quantitative factors. Below is a checklist of metrics which I collate in an excel sheet whenever my vested REITs report their quarterly results. You can choose to track the 5-year or 10-year performance track record of these metrics if you wish to. These are the quantitative stuff I look out for.

  •  Growing DPU
  •  Growing NAV
  •  Stable gearing ratio below 38%
  •  Stable or long WALE (Less than 25% of NLA expiring in a single year)
  •  Well-staggered debt expiry profile
  •  High interest coverage
  •  High percentage of fixed-rate debt
  •  Stable & high occupancy rate above 90%
  •  Positive rental reversions
  •  High tenant retention rate
  •  Healthy land lease tenure profile (preferably freehold or long lease-hold)


All these information could be found in the REITs’ annual reports. Pretty straightforward actually. Just download the PDF file from their websites and punch the figures into an excel sheet. The qualitative factors, however, are trickier to decipher.


Scale – Big Is Beautiful
A mega-scale REIT operates more efficiently over the long-term. CapitaLand Mall Trust (CMT) owns such a massive portfolio of shopping malls that it could afford to redevelop Funan mall over 2 years without significant impact on its DPU. Frasers Centrepoint Trust (FCT) managed to carry out major AEI at NorthPoint mall while maintaining its DPU growth last year. This is impossible for a small REIT such as SPH REIT which owns only 2 malls.  Other mega-sized REITs like Ascendas REIT (AREIT), Mapletree Logistics Trust (MLT) & Mapletree Industrial Trust (MIT) enjoy this competitive advantage too.

Secondly, these giant REITs could recycle capital efficiently by divesting old, low-yielding properties with limited redevelopment potential and acquiring new, higher-yielding properties in order to grow DPU. This is illustrated by CMT’s recent divestment of Sembawang Shopping Centre. The sale proceeds would be used to partially fund the acquisition of a 70% stake in WestGate Mall.


Sponsors – Leveraging On Institutional Resources
Recently, a couple of REITs with strong, institutional sponsors have announced overseas expansion mandate. This development is most obvious among the Mapletree stable of REITs. They mean business and no time was wasted. MIT expanded into the US data centre market in a joint venture with Mapletree Investments. Mapletree North Asia Commercial Trust (MNACT) expanded into the Japanese office market. MLT acquired a 50% stake in its sponsor’s 11 China logistics properties, aiming to ride on the ‘One Belt, One Road’ initiative. 






All these expansion was made possible/easier due to the sponsors’ ready pipeline of ROFR assets, financial support, existing management platforms and deep knowledge of those overseas markets.  Scale and presence of sponsors in overseas markets are key ingredients for expansion success of local REITs. Institutions like Mapletree Investments and Ascendas-SingBridge are major units of Temasek Holdings, one of the top sovereign wealth funds in the world. They have achieved a sophisticated level of institutional framework. They are committed. They are here to stay and prosper over the long-term with well-established investment processes and systems. They are not just some ‘fly-by-night’ asset managers out for a quick buck. For example, AREIT’s freshly-acquired UK logistics portfolio would be managed by the talents at Ascendas Funds Management. Similarly, the management team of MNACT’s Japanese office properties have been running the operations in Japan for years. This would make MNACT’s expansion into the Japanese market operationally smoother. The REIT does not need to struggle in a foreign market, starting from scratch.


Another potential competitive advantage Mapletree Investments has over other sponsors is its deep bench of real estate managing talents. Warren Buffett essentially leaves the day-to-day running of his vast business empire in the hands of highly capable managers/executives whom he trust. Mapletree found a way to ensure continuity in its real estate management teams by cultivating strong partnership ties with Singapore Management University (SMU).  Since 2013, Mapletree has awarded 20 Mapletree Bursaries to 15 underprivileged students to motivate them to achieve educational excellence by providing them with financial support.  To date, 11 of the recipients have graduated, and four are still pursuing their undergraduate studies at SMU. A multi-faceted Mapletree Real Estate Programme was launched in Jan 2018. This programme aims to equip students with the necessary knowledge and cross-disciplinary skills to navigate the growing real estate sector in Singapore and globally.

In conclusion, I would urge unit-holders not to become too obsessed with only the quantitative factors. Spend some effort, dig deeper, read more and you would realise that the qualitative factors could be the ‘secret sauce’ to a well-managed REIT. 



If you want to shine like a diamond, you need to be cut like a diamond
DW

Sunday, August 12, 2018

Dividend Warrior's Portfolio 'Football' Team


The European football season is finally upon us after an exhilarating World Cup 2018! I am a huge fan of the English Premier League (EPL).  This season, fans are in for a treat. We have been blessed with 6 elite managers at the top 6 clubs. All of them have unique philosophies in how football should be played in order to achieve the end goal – silverware. Pep Guardiola with his ‘tiki-taka’. Jurgen Klopp with his ‘Gegenpressing’. Jose Mourinho with his ‘park the bus’.  Maurizio Sarri with his ‘Sarri-Ball’.  Constructing a football team is akin to building a portfolio. You need an over-arching investing philosophy/strategy. Next, you need to find the balance between offense and defence. If certain players are off-form or injured (companies facing headwinds), you must be ready to make substitutions.



Without further ado, this is my investment team!

Philosophy/Strategy: Dividend Investing with focus on logistics, healthcare, data centres & finance

Formation: Classic Diamond Midfield 4-4-2 (Who doesn’t like the classics, right? :P )


Substitutes: MCT, CMT & Suntec REIT

Thursday, August 2, 2018

3Q2018 Performance Of My Vested REITs & Passive Income Update

REIT
DPU Performance Year-On-Year
Keppel Data Centre REIT
+4.6% (Excluding one-off distribution)
Ascendas REIT
+4% (Excluding one-off distribution)
Mapletree Logistics Trust
+3.7% (Adjusted)
ParkwayLife REIT
+3.2% (From recurring operations)
Frasers Logistics & Industrial Trust
+2.9%
Mapletree Industrial Trust
+2.7%
CapitaLand Mall Trust
+2.2%
Frasers Centrepoint Trust
+1.8%
Mapletree North Asia Commercial Trust
+1.6%
Mapletree Commercial Trust
Flat
Suntec REIT
-0.8%


REIT
Change in NAV per unit
Mapletree Logistics Trust
$1.02 to $1.12 (+9.8%)
Mapletree Commercial Trust
$1.37 to $1.49 (+8.8%)
Mapletree Industrial Trust
$1.40 to $1.48 (+5.4%)
Frasers Centrepoint Trust
$1.92 to $2.02 (+5.2%)
CapitaLand Mall Trust
$1.91 to $1.99 (+4.2%)
Keppel Data Centre REIT
$0.97 to $1.01 (+4.1%)
Ascendas REIT
$2.04 to $2.03 (-0.5%)
ParkwayLife REIT
$1.73 to $1.72 (-0.58%)
Suntec REIT
$2.094 to $2.076 (-0.86%)
Frasers Logistics & Industrial Trust
$0.94 to $0.92 (-2.1%)
Mapletree North Asia Commercial Trust
$1.376 to $1.321 (-4%)


3Q 2018 Dividends + Distributions = $4,938
Keppel Data Centre REIT
$498.60 (Advance CD) + $153 (Current CD)
Mapletree Logistics Trust
$500.48 (Advance CD) + $200.12 (Current CD)
Mapletree Industrial Trust
$600
Mapletree Commercial Trust
$526.28
DBS
$595.80
Raffles Medical Group
$25.48
Frasers Centrepoint Trust
$457.95
Frasers Logistics & Industrial Trust
$454.50 (Advance CD)
ParkwayLife REIT
$446.60
CapitaLand Mall Trust
$196.70
Suntec REIT
$148.44
Mapletree North Asia Commercial Trust
$134.04



Thursday, May 17, 2018

Quarterly Performance of my vested REITs & Passive Income Update (1H 2018)

REIT
DPU Performance y-o-y
Mapletree Logistics Trust 
+ 4.1%
ParkwayLife REIT
+ 3.6% (recurring operations)
Frasers Logistics & Industrial Trust
+ 3.4%
Keppel DC REIT 
+ 3.4% (Adjusted)
Mapletree Industrial Trust
+ 2.4%
Frasers Centrepoint Trust 
+ 2%
CapitaLandMall Trust 
+ 1.8%
Ascendas REIT 
+ 1.5%
Mapletree Commercial Trust 
+ 0.4%
Suntec REIT 
+ 0.3%
Mapletree Greater China Commercial Trust 
-2.8%


REIT
Change in NAV per unit
Mapletree Commercial Trust 
$1.38 to $1.49 (+6.5%)
Mapletree Logistics Trust 
$1.04 to $1.10 (+5.77%)
Mapletree Industrial Trust
$1.42 to $1.47 (+3.5%)
Mapletree Greater China Commercial Trust 
$1.301 to $1.338 (+2.84%)
CapitaLandMall Trust 
$1.92 to $1.93 (+0.52%)
Frasers Centrepoint Trust 
$2.02 to $2.03 (+0.5%)
Ascendas REIT 
$2.04 to $2.04 (no change)
ParkwayLife REIT
$1.76 to $1.75 (-0.57%)
Suntec REIT 
$2.119 to $2.104 (-0.7%)
Keppel DC REIT 
$0.97 to $0.96 (-1%)
Frasers Logistics & Industrial Trust
$0.94 to $0.91 (-3.2%)


My REITs portfolio delivered another firm quarter in terms of DPU growth year-on-year. Looking forward to the great overseas expansion! Some of my vested REITs are on an acquisition spree in foreign markets such as China, Japan, Germany and Holland. I was expecting rights issue to be used to fund these acquisitions. Unfortunately, only FLT requires me to inject fresh funds.  The rest went the private placement route. Due to a lack of opportunities to deploy my investable funds in the market, I applied for the June’s issue of Singapore Savings Bond (SSB). The SSB is a practical place to park some idle cash, especially over a 2-year period.



Progressing well towards my 2018 passive income target of S$22k.....

1Q 2018
Singtel
S$980
SPH REIT
S$134
ParkwayLife REIT
S$371.80
CMT
S$203
FCT
S$450
Suntec REIT
S$156.24
MCT
S$542.80
MLT
S$747.50
Keppel DC
S$628.20
MIT
S$189


2Q 2018
DBS
S$1092.30
OCBC
S$478.80
CMT
S$194.60
FCT
S$465
Suntec REIT
S$145.98
ParkwayLife REIT
S$348.70
MCT
S$535.72
MGCCT
S$452.04 + S$91.68 (Advance CD)
MLT
S$693.40
Ascendas REIT
S$1197.76
FLT
S$1624.50
MIT
S$295


Dividends Received & Will Be Receiving (1H 2018) = S$12, 018.02


LinkWithin

Related Posts Plugin for WordPress, Blogger...