Dividend Warrior's Top Defensive REIT - The King Of S-REITs!

Singaporean parents want their children to become successful and well-paid lawyers, doctors and bankers. Some people do not end up in these top-tier professions. That's just life. So, what's the next best thing to do. Well, we can try to milk them for rental income. For example, Mount Elizabeth Hospital and Gleneagles Hospital have some of the best healthcare talents in the region. By investing in ParkwayLife REIT, unit-holders are essentially banking on the earning abilities of specialist doctors and rising demand for better healthcare services. Furthermore, the huge number of Japanese nursing homes in ParkwayLife REIT's portfolio also allows unit-holders to benefit from Japan's aging population, which is pretty much a guaranteed long-term trend. It is not cyclical. There are other reasons why this premium healthcare REIT is my top 'defender'.

• The manager has never sought a general mandate to issue new units. In other words, they were able to grow the DPU and NAV of the REIT without using private placements, preferential offerings or rights issues, ever. Their focus is sustainable, modest growth over long-term. Their track record is hard proof. 11 consecutive years of DPU growth. They even managed to generate capital gains from divesting older assets.

• Their Singapore hospitals are operated under very long leases of (15 + 15) years since 2007. Their Japanese nursing homes have a WALE of 12.8 years.

• Leases are structured in a way that 90% of the rents for the entire portfolio have downside protection. 60% of rents are pegged to inflation rate. Its Singapore hospitals have a guaranteed 1% growth in minimum rent annually. Yes, guaranteed. How awesome is that!

• Debt maturity profile is well spread out over 3 years. Very little refinancing needs this year and next. All-in cost of debt is ridiculously low at 0.93%, compared to other S-REITs. The interest cover is 13.5 times, highest among S-REITs.

Dividend Warrior's 9M2019 Net Worth Update

* CPF OA savings shall be used to pay for my BTO flat

Dividend Warrior's 9M2019 Portfolio Quick Update - $600k Milestone Achieved!

Is it just me, or is the world getting crazier out there? Donald Trump facing impeachment, Boris muddling towards Bexit, violent rioters getting shot in Hong Kong, political tensions escalating between Japan & South Korea. Oh, don't forget about a teenager lecturing full-grown adults at the United Nations on the subject of global warming and the eventual mass extinction of humans. Meanwhile, fires in the Amazon forest raged on, sending more greenhouse gases into the atmosphere. On the economic front, manufacturing figures and factory output from nations such as China, Germany and Japan continue to trend down. FedEx earnings & sales missed market expectations. HP planning to cut up to 9,000 jobs worldwide. September automobile sales dropped in the US. President Trump slapped 25% tariffs on various European goods & products. I'm not holding my breath for a successful trade deal between the US and China anytime soon. It's gonna drag on for sure.

It seems the only group of people who still care about the global economy and took decisive actions were the central banks. The US Federal Reserve and European Central Bank cut rates in the third quarter. Following the footsteps of Japan, bond yields in Europe have gone negative too. Slowing growth, stubbornly low inflation and lack of real wage growth in the developed nations. That's the state of the world right now. There is no alternative (TINA) but to hunt for higher yields in REITs and dividend stocks. Assets which are generating stable cashflow are in demand. There is no way the central banks can afford to hike rates and risk a global recession. Interest rates are never going back to the previous high of 5%, not in the near future anyway. Luckily, Singapore is a leading REITs hub in Asia. We should capitalise on this niche advantage.

Top 15 Core Holdings (As of 30 Sep 2019)

Portfolio Cost: S$458, 587
Portfolio Market Value: S$604, 955
Portfolio Overall Unrealized Profit: S$146, 368
Dividends Collected (9M2019): S$19, 210
Current Warchest: S$8, 000

Portfolio Actions in 3Q2019:

• Initiated small position in Hong Kong Land
• Averaged down on Propnex, which overtook Suntec REIT as my 15th largest core holding
• Applied 2000 units for Keppel DC REIT preferential offering