SREITs Weekly Summary - 12.5.2017

I have created a weekly table comparison chart for the SReits under my watchlist. I am comparing the closing price change between last Friday and this week.


Retail Sector Reits are not performing well for this week again.

If you are interested in the daily performance, below table shows the result. I have also updated the price of the individual counters over here.

I Stepped on Banana Skin and had a Bad Fall...with this REIT *Ouch*

When I first started investing in Reits, I did not research the companies that I was going to invest in. I bought purely on the dividend yield. Below shows the price chart of this Reit that I invested in. My average price was $1.235 and I owned 16000 shares. Can you guess which Reit?

Screenshot from stocks.cafe

I held this stock for a few years. Both the share price and dividend yield keeps going down. I decided to liquidate my holdings in this Reit last year when the ceo made this comment in 1 of their company announcement: In the meantime, Unitholders are advised to refrain from taking any action in respect of their units in Sabana REIT (“Units”) which may be prejudicial to their interests, and to exercise caution when dealing in the Units. 

I had a wakeup call at that moment. 😱 What is this guy trying to say? Sounds like a warning to me. I thought if the management team was still in their la la land and couldn't wake up, maybe I should be the 1 waking up. I sold all my holdings at $0.51 when the market opened. I knew I made the right choice to cut loss when I read about their rights issue and meeting with Sichuan Development Holding's President. They can't even do a good job with local market and they want to venture into overseas market?

Fast forward to today, they just announced their quarterly result yesterday on 10.5.2017. As usual, the results look really bad.

However, this time round there is a piece of good news. The ceo has resigned and his last day would be on 31.12.2017. Hopefully, they could find a capable successor soon to succeed the current 1.

Now back to bad news for this Reit. During their recent AGM, there's this piece of slide. 36.8% of their leases are due for expiry this year. Five master leases are to expire in 4Q 2017, three of which are Sponsor related properties. The Manager has already initiated discussions with the master tenants of these five properties. Positive or Negative rental reversion? Hopefully their sponsor can support the Reit by volunteering to pay higher rents. 😀 Fun fact: There's only 8 presentation slides for their AGM and only 4 slides contain relevant information.

My experience with this Reit makes me more cautious when investing for dividends. I would prefer investing in a company with a good track record and strong sponsor. The track record of this Reit was too short when I invested in it. I prefer at least 5 years of dividend records. That's why I am not invested in EC World Reit yet even though I see the huge potential for ecommerce. The Manager of the Reit is also very important. Their interests have to be aligned with the shareholders. For this company that I talked about today, the Management team are paid a fix sum of salary and not tied to the performance of the Reit. Lack of motivation? If not motivation, then competency?

I am glad I "resigned" last year. My remaining funds left from this Reit are better off invested elsewhere. I hope this ceo will not join the other companies that I am currently invested in, 😀

My Purchase for May 2017

For the month of May, I just added Guocoland to my portfolio. GuocoLand Limited ("GuocoLand") is a premier regional property company with operations in the geographical markets of Singapore, China, Malaysia and Vietnam. In 2017, GuocoLand marked its expansion beyond Asia into the new markets of the United Kingdom and Australia through a strategic partnership with Eco World Development Group Berhad in Eco World International Berhad. Headquartered in Singapore, the principal business activities of GuocoLand and its subsidiaries (“the Group”) are property development, property investment, hotel operations and property management.

Upcoming project in 2017:

450 units comprise of 2 to 4 bedroom apartments across 2 30-storey towers

Tanjong Pagar Centre which is the tallest building in Singapore is a recent development by Guocoland. Can admire and learn more about this property here.

Insider trading in recent months is shown below.

Screenshot using Spiking app

Screenshot using My SGX app

NAV of Guocoland is $2.95. Current share price as at 8/5/2017's closing price was $1.82. It is trading very near to 52 week low value. Dividend yield based on $0.05 DPU is 2.74%. The yield is low but I am buying for potential capital gain. 😀

Guocoland occupies just around 3% of my portfolio. For those small position shares, I will accumulate on further weakness. 1 of them is Singtel which I am keeping a close watch. I will probably wait till June unless the discount is too irresistible.

My Dividend Income for April 2017

For the month of April, I only received dividends from M1. However, there are 5 company shares which I owned that XD in April. The companies and the amount that I would receive dividend income from are as follows:

Frasers Commercial Trust - $318.0234

Cache Logistics Trust - $288

Sembcorp Industries - $40

Soilbuild Business Space REIT - $148.90

M1 - $531

Screenshot from Stocks.cafe

If I compared this quarter earnings with the same quarter last year, I will be missing the income from Sabana and Suntec Reit. For Suntec Reit, I will be looking for opportunity to buy again when the dividend yield becomes attractive again. Sabana Reit was a losing investment which I am glad to be rid of. If the Management team is incompetent, it is better to cut loss and move on. I have also increased my Frasers Commercial Trust's position over the 1 year period. It has doubled in size and is currently my second largest holding.

My May's dividend income will be much better than last year's results as I have bought more shares over the 1 year period. 😀

SREITs Weekly Summary - 5.5.2017

I have created a weekly table comparison chart for the SReits under my watchlist. I am comparing the closing price change between last Friday and this week.


Retail Sector Reits are not performing well this week. This could be due to the XD effect.

If you are interested in the daily performance, below table shows the result. I have also updated the price of the individual counters over here.

Is STI ETF a Worthwhile Investment?

A lot of investors prefer investing in ETFs rather than Unit Trusts due to it's low fees. For Singaporeans, we may choose to invest in STI ETFs. There are two STI ETFs listed in the SGX, SPDR STI ETF and Nikko AM STI ETF. Today, I will show well Niko AM STI ETF holds up against the performance of 2 Unit Trusts, Aberdeen Singapore Equity and First State Dividend Advantage. It is not exactly an apple to apple comparison as First State Dividend Advantage is invested in Asia Pacific regions other besides Singapore.

Let's take a look at a 1 year chart. If we invest in $100 in each of them, at the end of a 1 year period ending Apr 25 2017, we would receive $117.50 from First State Dividend Advantage, $113.72 from Nikko AM STI ETF, $109.43 from STI Index and $116.11 from Aberdeen Singapore Equity.

                        Screenshot using Fundsupermart's Chart Centre function

1 year may be too short to judge the performance right? Ok, let's take a look at their 5 year chart. Now we can really see a huge difference in performance. If we invest in $100 in each of them, at the end of a 5 year period ending Mar 30 2017, we would receive $163.65 from First State Dividend Advantage, $122.01 from Nikko AM STI ETF, $106.60 from STI Index and $123.73 from Aberdeen Singapore Equity. To be fair to Nikko AM STI ETF, we may need to add back the dividends to account for the overall performance. If we add back say $15, the performance would be better than Aberdeen Singapore Equity. However, I can't confirm if the Chart already factors in the dividends for the ETF. I also added in SPDR STI ETF for this comparison and the returns is $122.69.

Finally, let's look at 10 year comparison chart. For this comparison, we will need to ignore Nikko AM Singapore STI ETF as it didn't experience the 2008-2009 market correction. The ETF only started after the huge correction. Almost 50% drop from 2008-2009. If we invest in $100 in each of them, at the end of a 10 year period ended Mar 30 2017, we would receive $191.31 from First State Dividend Advantage, $131.75 from SPDR STI ETF, $94.46 from STI Index and $138.86 from Aberdeen Singapore Equity.

I went to SPDR website and below is a screenshot from their website. Ouch! 2.86% annualised compounded returns inclusive of dividends over the last 10 year period. Would STI ETF return to it's former glory? How many 10 years do investors have? If you are an STI ETF investor, you will have to decide if the current returns are good enough for you. The 1 year return looks good but is it sustainable? When I compare the 1 year return with an Asia Unit Trust, it also underperforms.

When I started investing in Unit Trusts many years back using online platforms such as FSM, there was a sales charge of 1.5%. It subsequently reduced to 0.75% as my investment amount increases and now it is 0% for all investors. However, FSM has a quarterly platform fee for cash investments which I have since shifted out my cash investments to dollarDex. Similar to ETF, it is possible to do DCA with Unit Trusts. My investments with dollarDex are currently only bonds/money market and not equities. 

As with all investments, it is possible to lose money with Unit Trusts. I sold my equity funds at 5 figure losses when the market was bad. I have since recovered the losses with my bond funds. I did also make money with equity funds during my time with FSM. This Post is not a recommendation to buy the Unit Trusts mentioned as I myself might sell my equities (using CPF OA) soon. I only want to highlight the performance of STI ETF and compare it with Equity Unit Trusts performance for the past 10 years. For me, I won't touch STI ETF. Ever.

What I Learnt from EC World REIT's 2016 Annual Report - Part 2 (Conclusion)

Part 1 Link

Tenants Diversity

The majority of the leases have positive rental escalation as shown below.

Long land tenure expiry. 

The market valuation as at 31 Dec 2016 (appraised by Colliers) for all the properties are also more than purchase consideration values. 

Will EC World acquire these 2 new Properties?

The existing properties are shown as below.

Screenshot from AGM Presentation

NAV as at 31 Dec 2016 is $0.93. Gearing is 27.6%.

Outlook for e-commerce in China

EC World REIT's price as at 28 April was $0.76. The current price is below the NAV of $0.93. With the low gearing of 27.6%, more acquisitions could be seen in the near future. In fact, they should do so as to stagger their lease expiry. I am uncomfortable with their current lease expiry profile as seen in Part 1 of my post. For investors interested in this Reit, do take note that ECW’s distributions policy is to distribute 100.0% of ECW’s Distributable Income for the period from the Listing Date to 31 December 2017. Thereafter, ECW will distribute at least 90% of its Distributable Income on a semi-annual basis.

The Sponsor has a 41.4% stake in ECW. With such a huge stake, their interests should be aligned with shareholders. It is in their best interests that the Reit performs well. 

Screenshot from SGX website

This Reit does look interesting. My main concern is the lease expiry for FY2020. I will definitely be watching this Reit. 😀