Top 15 Core Holdings (Dec 2019)
Portfolio Actions in 4Q2019:
- Full divestment of MNACT in 2 batches. Half at $1.25 and the other half at $1.18, making a profit of +39.7% over 4 years. Including cash distributions collected, the total return is around +72%.
- Full divestment of SATS at $5.01, making a profit of +4.6% in 5 months.
- Full divestment of APAC Realty at $0.51, making a loss of -5.6% in 8 months.
- Applied for Ascendas REIT’s rights with excess. Fully allocated.
- Applied for Mapletree Commercial Trust’s preferential offering with excess. Fully allocated.
- Applied for Keppel DC REIT’s preferential offering with excess. Fully allocated.
- Accumulated more Suntec REIT at $1.81
Best. Year. Ever.
2017 set the previous record for the best investment returns
in my investing journey. Back then, I was convinced that performance would not
be bettered, ever. Little did I expect for the record to be broken in 2019.
Remember all the pessimistic, doom-and-gloom media headlines in Dec 2018 &
Jan 2019? US-China trade tensions, US Fed rate hikes, British government
struggling to deliver Brexit and later in 2019, the prolonged Hong Kong
protests. In such a volatile geo-political year, my REIT positions went on a
tear, thus leading my portfolio value to hit 2 milestones in 2019, $500k in May then $600k in September. Investors are seeking refuge in defensive, cash-generating assets. I
had to, sort of, thank President Trump for a spectacular 2019 (investment-wise).
Yeah, I know, we live in strange times. Without the trade war, the global
economy would not have slowed down as much, the US Fed would not have turned
dovish abruptly and my portfolio performance would be mediocre. Well, seems
like the old adage of ‘time in market is better than timing the market’ is
still the cast-iron truth.
Rising Geopolitical Tensions & Socio-economic
Problems
I had to make a big decision, divesting MNACT. The majority
of net property income of MNACT comes from Festival Walk Mall. During the early
days of the Hong Kong protests, the violence was limited to the CBD area, far
from Festival Walk. Weeks later, violence escalated and chaos spread to the sub-urban
neighbourhoods. I was still in observation mode, hoping that the situation will
calm down eventually, like the yellow umbrella movement. Unfortunately, the
situation escalated until a student was shot by the police. That was the moment
when I decided to divest half of my MNACT position. The next phase of the
protest shifted to the university campuses, where students made Molotov bombs,
arrows, bows, shields and built barriers. This was when I divested the
remaining half. I was lucky as the violence finally reached Festival Walk
shortly afterwards. The mall was heavily vandalised and a giant Christmas tree
was burnt down by angry protesters.
There was a secondary reason for divesting MNACT. I found a decent replacement in Suntec REIT. Similar to MNACT, it is also a commercial/retail hybrid REIT, but with quality assets in Singapore and Australia where violent protests are rare. Political stability and social peace are vital to rental collection. I believe Suntec REIT is well-poised for growth in 2020 and beyond.
There was a secondary reason for divesting MNACT. I found a decent replacement in Suntec REIT. Similar to MNACT, it is also a commercial/retail hybrid REIT, but with quality assets in Singapore and Australia where violent protests are rare. Political stability and social peace are vital to rental collection. I believe Suntec REIT is well-poised for growth in 2020 and beyond.
2020 Investing Strategy – Keep Riding On The Rental
Economy
"You
build an empire by owning the land upon which that burger is cooked. Land....
that's where the money is."
One of the biggest
monopolies in Singapore (and other matured economies) is the rental monopoly
which is dominated by large-cap REITs. Collecting rental income as a landlord
is a business model that stood the test of time. It has been one of the more
solid business ideas that human ingenuity has devised. As a new decade starts,
I am counting my blessings in stable, 'never-rock-the-boat' Singapore. Singaporeans
don't aim to break or change the system. We love the status quo. We actually embrace
it. The diligent ones find ways to benefit from it. This beautiful,
capitalistic rental economy has been painstakingly built by our forefathers
over decades. Serious blood and sweat. Do not let it go to waste. Let’s harvest
the hell out of it!
 |
| FCT doing all the 'heavy-lifting' through the years. Unit-holders merely sit back and enjoy the journey :) |
Managers running the large-cap REITs in the Mapletree,
CapitaLand, Ascendas and Frasers Centrepoint families are always hunting for growth
opportunities, both organic and inorganic. They are largely competent based on
their track records. MCT, MINT, MLT, KDC, FCT, CMT and Suntec REIT had gone on an
acquisition spree this year. I gladly participated in their rights issue and
preferential offerings. Let REITs do the scaling up and long-term compounding
for us (as shown in FCT's track record above). We just tag along for the ride.
No more fresh buys of REITs for me in 2020. I shall channel the dividend cashflow into non-REIT counters. In fact, I already started this process in 2019 by initiating a huge position in ComfortDelgro and a couple of minor positions in HRnet, F&N, Propnex, UOB and Hong Kong Land.
No more fresh buys of REITs for me in 2020. I shall channel the dividend cashflow into non-REIT counters. In fact, I already started this process in 2019 by initiating a huge position in ComfortDelgro and a couple of minor positions in HRnet, F&N, Propnex, UOB and Hong Kong Land.
Dividend Warrior
