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CapitaLand Mall Trust’s Q3 and 9M FY2020 Results – A Summary and My Thoughts

CapitaLand Mall Trust’s Q3 and 9M FY2020 Results – A Summary and My Thoughts

REIT CapitaLand Mall Trust (SGX:C38U) released its 3Q results, as well as for the first 9-months of the financial year 2020 (ended 30 September) early this morning.

CapitaLand sells Bedok Mall to CapitaLand Mall Trust

The post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with a username known as @ljunyuan and has 1412 followers.

This is also the last time the REIT will be reporting its results under CapitaLand Mall Trust – it will be renamed as CapitaLand Integrated Commercial Trust with effect from 03 November 2020 (you can read the news report about this in full here.)

Apart from its financial results, debt and occupancy profile, and distribution payout to unitholders, I’m also interested to find out whether or not there are any improvements compared to the second quarter (ended 30 June 2020) where its results were badly affected due to the two-month circuit breaker period.

Let’s begin…

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Key Summary of Frasers Centrepoint Trust’s (FCT) EGM on 28 September 2020

Key Summary of Frasers Centrepoint Trust’s (FCT) EGM on 28 September 2020

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1394 followers.

This morning, retail REIT Frasers Centrepoint Trust (SGX:J69U) held its extraordinary general meeting (EGM) to seek unitholders’ approval on the REIT’s proposed acquisition of the remaining 63.1% stake in AsiaRetail Fund Limited (whose portfolio consists of Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square, Tampines 1, and Central Plaza), proposed equity fundraising, as well as the proposed divestment of Bedok Point.

I have attended the EGM as a unitholder of the REIT and for the benefit of those who weren’t able to attend, in this post, you’ll find a summary of the presentation by Mr Richard Ng (the CEO of the REIT) on how the acquisition of AsiaRetail Fund Limited is beneficial for the REIT and its unitholders, results of the resolutions that were put to vote, along with responses to some of the questions raised by unitholders…

Benefits of the Proposed Acquisition of AsiaRetail Fund Limited

The following are some of the key benefits of the REIT’s proposed acquisition of the remaining 63.1% stake of AsiaRetail Fund Limited to highlight:

  • From 7 malls in the REIT’s portfolio currently, post-acquisition, its portfolio will have 11 malls. Some of the other key statistics include REIT’s portfolio net lettable area increasing from 1.4m sq ft to more than 2.3m sq ft, along with the number of leases increasing from 800 to more than 1,500.
  • The proposed acquisition is a DPU-accretive one, and based on its DPU for FY2019, after the acquisition of AsiaRetail Fund Limited, as well as after the divestment of Bedok Point, the REIT’s DPU will be increased to 13.02 cents/unit (from 11.99 cents/unit) – this represents an increase by 8.59%.
  • Post-acquisition, Frasers Centrepoint Trust will become 8th largest S-REIT (in terms of market capitalization), as well as being the 8th largest S-REITs by free-float – this will result in a higher index weightage in the FTSE EPRA/NAREIT index, and this will also expand the REIT’s outreach to new investors.
  • The enlarged portfolio will also see a reduced concentration risk from any single asset (from around 30% now to no more than 22% post-acquisition.)
  • In terms of tax leakages, Mr Ng share that currently, the REIT is incurring costly tax leakages of approximately S$4.7m annually as a partial owner of AsiaRetail Fund Limited. However, post-acquisition, it will be able to reduce its tax by approximately $400k to $500k a month.
  • While post-acquisition, the REIT will see its gearing ratio increased to 39.3% (from 35.0% currently), but Mr Ng highlighted that its average cost of debt will be reduced to 2.3% (from 2.5%), and at the same time, its weighted average debt maturity will be extended to 4.3 years (from 2.3 years at present.)


Results of the Resolutions

The following are results of the 5 resolutions proposed at the EGM:

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Frasers Property and its REITs – My Personal Technical Analysis (19 August 2020) (Guest Post)

Frasers Property and its REITs – My Personal Technical Analysis (19 August 2020) (Guest Post)

Listed in the Singapore Exchange Securities Trading Limited (“SGX-ST”) and headquartered in Singapore, Frasers Property Limited (SGX:TQ5) is a multi-national owner-operator-developer of real estate products and services across the property value chain.

Northpoint City, Opens in Grandeur

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1241  followers.

Its properties span across 5 asset classes – residential, retail, commercial and business parks, industrial and logistics, as well as hospitality across different geographical locations and some of them include Southeast Asia, Australia, Europe, as well as China.

Frasers Property is also a sponsor of 3 REITs: Frasers Centrepoint Trust (a pure-play retail REIT), Frasers Logistics and Commercial Trust (whose portfolio include commercial and business parks, as well as industrial and logistics properties), and Frasers Hospitality Trust (where it owns and/or operates serviced apartments and hotels.)

In this post, I will be sharing with you my technical analysis on the recent share price movements of Frasers Property and its 3 REITs (based on a daily timeframe), along with my analysis of how their share prices are likely to move in the near-term.

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My Technical Analysis of the 4 Mapletree REITs (03 August 2020) (Guest Post)

My Technical Analysis of the 4 Mapletree REITs (03 August 2020) (Guest Post)

Today, I’d like to share my personal technical analysis on the four Mapletree REITs – namely Mapletree Commercial Trust (SGX:N2IU), Mapletree Industrial Trust (SGX:ME8U), Mapletree Logistics Trust (SGX:M44U), and Mapletree North Asia Commercial Trust (SGX:RW0U) – particularly, how their unit prices are likely to move in the near-term (based on a daily timeframe.)

image-107-min

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1241  followers.

$Mapletree Log Tr(M44U.SI)
$Mapletree NAC Tr(RW0U.SI)
$Mapletree Ind Tr(ME8U.SI)
$Mapletree Com Tr(N2IU.SI)

First and foremost, a very good Monday morning to you. We’re into the first working day of yet another new month. Hope you’ve had a great long weekend with your loved ones.

Before I begin, a disclaimer – whatever you may read in this post is purely for educational purposes only. They do not represent any buy or sell recommendation for any of the REITs. Please do your own due diligence before you make any investing/trading decisions.

With that out of the way, let’s begin…

Mapletree Commercial Trust (SGX:N2IU)

This blue chip REIT has a total of 6 properties in its portfolio, all located in Singapore – VivoCity, Mapletree Business City I and II, PSA Building, Mapletree Anson, as well as Merrill Lynch Harbourfront.

The following is the unit price movement of Mapletree Commercial Trust (on a daily timeframe) since April 2020:
Daily Unit Price Movement of Mapletree Commercial Trust (SGX:N2IU) since early-April 2020

As you can see from the above, since bottoming at S$1.46 in early-April, its unit price have recovered and moved along the green uptrend channel, where it peaked at S$2.23 in early-June before retreating.

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Summary of Mapletree North Asia Commercial Trust’s 7th AGM on 16 July 2020 (Guest Post)

Summary of Mapletree North Asia Commercial Trust’s 7th AGM on 16 July 2020 (Guest Post)

Retail and office REIT Mapletree North Asia Commercial Trust (SGX:RW0U) held its 7th annual general meeting for the financial year 2018/19 ended 31 March 2020 via virtual means (due to the ongoing Covid-19 situation in Singapore) earlier this afternoon (16 July 2020), which I have attended as a unitholder.

85ef91ee-2849-472a-bb6a-c5ebbee1ae68

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1241  followers.

For the benefit of those who were not able to attend the meeting, in this post you’ll find a summary of the most important pointers to take note of (as a unitholder):

Presentation on Key Performance Statistics for FY2019/20 by Mr Ng Wah Keong, Chief Financial Officer of Mapletree North Asia Commercial Trust

Financial Performance (FY2018/19 vs. FY2019/20):

  • Gross Revenue: Down 13.3% year-on-year (y-o-y) to S$354.5m (FY2018/19: S$408.7m) – the decrease was due to the temporary closure of Festival Walk (for repair works), lower occupancy in Gateway Plaza, offset by its Japan properties
  • Net Property Income: Down 15.7% y-o-y to S$277.5m (FY2018/19: S$329.0m) – Festival Walk contributed 53.7%, Gateway Plaza contributed 23.5%, Sandhill Plaza contributed 8.4%, and its Japan Properties contributed 14.4% (this includes the one month contribution from MBP and Omori, both properties acquired in February 2020)
  • Distributable Income to Unitholders: Down 5.3% y-o-y to S$227.9m (FY2018/19: S$240.7m)
  • Distribution Per Unit: Down 7.4% to 7.124 cents/unit (FY2018/19: 7.690 cents/unit) – Mr Ng informed that the REIT will be changing its distribution to unitholders from quarterly to semi-annual from FY2020/21 onwards

Capital Management (FY2018/19 vs. FY2019/20):

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19 Charts That Explain the Global Listed Real Estate & REIT Markets (Guest Post)

19 Charts That Explain the Global Listed Real Estate & REIT Markets (Guest Post)

UBS Global Research got a pretty good special taking stock of the global real estate scene. This covers the REITs in various global markets as well. A lot of these reports would want to shape our views on where are the attractive investment opportunities. This one is no different but the report does provide a lot of good data that I find will help shape your view as long term listed real estate investors.image-75-min

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 1051  followers.

If you identify yourself as a long term listed real estate investor or a REIT investor, this article might be suitable for you.

They presented some data that tells you:

    1. 10-year compounded return of Listed Real Estate versus other asset classes
    2. Correlation of GDP downgrade and Listed Real Estate performance
    3. Different layers of Listed Real Estate Valuation Metrics and how the various market rank
    4. Range of Historical Vacancies in different office markets
    5. Typical duration of Office Lease Tenures in various office markets
    6. Correlation between Listed Real Estate company’s EPS and global GDP growth
    7. Correlation between Listed Real Estate with equity and bonds
    8. Sensitivity Analysis of Interest Rate changes and Listed Real Estate Returns
    9. Correlation of Long term Yields and Demographic Changes
    10. Correlation of Long term yields and CAP rates
    11. FED Rate Hikes and Listed Real Estate Performances

And much more.

Let us get down to it.

1. Performance of Real Estate Equities Compared to Other Category of Securities

In the past 10 years to May 2020, global listed real estate delivered 6.7% a year. Listed real estate felt the impact of the pandemic more than global equities, who returned 9.8% during this period.

Physical real estate delivered a better return at 8.3% a year to December 2019 (due to the lack of availble data).

You can also compare global REITs return against other asset classes during this period.

2. Performance of Various Listed Real Estate Markets During 2020

Overall, global listed real estate have fallen by 20% this year. However, we observe that some countries have it worst such as France and Australia. Singapore REITs and Germany listed real estate have recovered relatively better.

On the right side, we also observe that most property sectors were hit but hotel, retail was more hard hit. This is because our movements were restricted to such an extent that overseas travel could not happen. Social distancing have also prevent retail operations.

While the stock prices have fallen, it does not mean that the cash flow of the underlying real estate business has dried up. Property tenants are contratually obligated to pay rent despite not making full use of it. Some tenants were very hard hit as they have no revenue and not enough working capital to fully pay for it.

The share price fell because stock markets are forward looking. The price reflects the uncertainty whether work from home, lower demand would change the long term nature of the rental income.

The uncertainty over rental income will in turn, affect the property values, which in turn, will affect stock prices.

If there is a secondary lesson to learn from this slide, it is that not all property segments are the same.

3. Economic Impact and Listed Real Estate Market Performance

This chart plots the change in year to date performance against the downgrade to a country’s GDP.

We observe a loose correlation between the economic impact (GDP) and performance by region.

Germany is unique in that the economic impact looks better than other countries. This is driven by the resilience of their residential sector, which dominates the market cap in Germany.

4. Valuation of Various Listed Real Estate Market

The analysts back tested different valuation metrics over time. They then weigh Price to NAV with a 50% weightage and 10% for the other 5 metrics.

Lower Z-Score reflects that based on that metric, the said market is cheap. (Blue is cheaper, red is expensive).

You can observe HK REITs, HK Property Stocks, China, and Japanese developers are the cheaper ones by all metrics.

The markets that are not cheap are Australia listed property companies and Singapore REITs.

I love spider graphs.

When we play a lot of computer games, this is one graph that shows which character or item is good. This spider graph presents valuation in a different view.

If all the legs of the graph is spread out wide, that region is cheaper.

We can see that Singapore REITs and Australia listed property companies are relatively expensive.

If there is one takeaway here, it is that there is not just one valuation metric.

If you want to have a greater margin of safety, layer price to NAV, PE, dividend yield and EBITDA divided by Enterprice together and you may find some company that is dead cheap based on all metric.

5. What Foot and Transit Traffic Tells Us About the Pandemic Recovery

The analysts trakc a number of unique data sets that can help inform their view of the markets globally during this pandemic.

What you see here is the foot traffic monitor. For most countries they have not recovered.
Here is one that monitors the public transit network traffic. Hong Kong did very well but the rest of the other countries were pretty depressed still.

6. Historical Vacancies in Different Markets

When you invest in a property company, management may update shareholders on the current vacancy rate or the amount of leasable space that are not leased out.

The best case is to have more spaces on lease, but it would be challenging for us to always have the best case.

To find out if this property is performing up to expectations, you can compare against the vacancy rate of the sub-market.

This chart above shows the vacancy rate of various office markets. London city has the wides range. Hong Kong office vacancy has climbed above the average.

Melbourne, Sydney CBD, and Tokyo Central 5 Ward vacancy are still within the historically lowest range.

7. How Different Are the Lease Tenures in Different Office Markets

The tenure of office lease term varies in different cities.

The tenure in major Asian cities tend to be shorter. The average tenure in Western cities tend to be longer.

 

8. CAP Rate Trends

CAP Rate is computed by taking the average net operating income of stabilized properties in that segment divide by the prevailing market value of the properties.

You can infer that this is like the average unleveraged net rental yield of the property segment.

If you rearrange this CAP rate formula, you can work out different things.

For example if your property rent for $10,000 a year and the CAP rate is 6%, if you take $10,000 divide by 6%, this will value your property at $166,666.

The CAP rate is in a way, like how investing people would use the discount rate.

Therefore, a high CAP rate lowers the valuation of your property, all else being equal. A lower CAP rate increases the valuation of your property.

The chart above shows the CAP rate change for different country segment from different time period.

You would observe that the CAP rate trend have been downwards. This reflects average property valuation rising faster than average rent. Most likely, this is due to greater demand for properties.

A lower CAP rate therefore leads to higher property value.s

Appreciate how high the CAP rate for Australia, UK and USA was in the past.

9. The Yield Spread Compared to Historical

This chart shows the physical property yield as a spread to the local 10-year bond yields. The rate at which the owners of the property lends at typically flows with the local 10-year bond yield.

So a wider spread means greater risk, greater value, possibly greater reward.

The current spread above the historical average for Hong Kong, Australia, UK initial, US, and continental Europe have been wide, indicating potentially greater reward.

10. The Leveraged Net Operating Income Yield of REIT’s Physical Property Indicates Attractive Value Versus Bond Yields

Because the yield spread is wider than the historical (previous chart), investors can possibly get a reasonable return on equity if they invest in REITs.

This chart shows the leveraged NOI yield of the properties belonging to REITs.

    1. This leveraged NOI yield is based on 40% debt 60% equity (40% LTV).
    2. NOI is equal to the stabilized rental revenue minus the stabilized cost expenses.
    3. The analysts assume the investors purchase this property with 40% loan. They then include the interest expense in the NOI computation.
    4. This NOI is then divided by the equity portion of the property.

What you see is the leverage yield.

I felt that if this is leveraged, an acceptable return with more margin of safety should be higher (perhaps close to 7-8%) in a normal interest rate environment.

However, on average, the leveraged yield is 6% which may mean the unleveraged yield is about 4.2% only. The yields in Hong Kong and Singapore should be even lower.

UBS has the opinion that these yields are attractive because if we compare them to the 10-year government rates for their respective countries, they looked very attractive.

In a yield-starved world, investors are on the look out for yield alternatives.

From this angle, REITs look more attractive vis a vis bonds.

11. The Correlation Between Listed Real Estate Company’s EPS and Global GDP Growth

This chart shows us that there is a reasonable correlation between earnings growth of listed real estate companies or REITs and global GDP growth.

By any indication, with the lower GDP growth, we should expect the EPS growth of real estate companies to fall drastically.

But I think, this time is a special situation. We have to wait for the rent collection to stabilize before making judgments if the EPS growth really becomes so negative.

 

12. Listed Real Estate Has Strong Equity Correlation and Weaker Bond Correlation

The historical relationship between bond prices (the inverse of bond yields) and listed global real estate is not very strong.

The average correlation is 0.15 since 1993.

However, a strong correlation exists for the relative performance of listed real estate against equities.

Listed real estate tend to outperform when bond yields fall.

Listed real estate companies, are… equities in general. If you are expecting listed real estate to help reduce the volatility of your portfolio, they might disappoint you.

Here is a sensitivity plot that shows the change in return from changes in US 10-year treasury rate.

We observe that when 10-year rate falls, the relative returns tend to be better but that is not always the case.

There are some outliers that, when rates increase, the relative returns were still quite OK.

13. The Correlation of Long Term Yields and Demographic Changes

This one is new to me.

The economist thinks that long term interest rates will remain low for some time.

The analysts think there are some structural changes in the economy, including aging populations and persistently high debt levels globally.

This suggests that 10-year treasury yields may trade in a lower range of 2-4$ over the next 20-30 years.

This chart shows the ratio of spenders (those in the 20-34 years old cohort) to savers (those in the 40-49 years old cohort) versus the 10-year treasury bonds.

The relationship looks strong.

This low rates trend looks supportive of listed real estate.

14. Correlation of CAP Rates and 10-Year Bond Yields

This chart above shows 2 different markets.

It shows that given enough time, there is a correlation between 10-year bond yields and the CAP rate.

Of course, bond yields are not the only influencing factors, with others including:

    1. rental growth expectations
    2. risk appetite
    3. weight of money

What I observed is that

    1. Office CAP rate correlation with 10-year yields is lower
    2. Retail CAP rate correlation with 10-year yields is lower
    3. Industrial and Apartment CAP rate correlation with 10-year yields are higher

 

15. Relationship Between FED Rate Hike and Equity, Real Estate Performances

There are 4 things overlayed in this chart.

The light brown line shows the real estate index while the dark brown line shows the equities index.

The light brown bars show the yield spread between the long duration treasury bonds versus the short duration treasury bonds.

This yield spread shows the shape of the yield curve. A region where the spread is high indicates that the yield curve is steep in a positive way. The yield curve narrows over time and then inverts. Correspondingly, we also see the bars becoming shorter and shorter.

Finally, the grey area indicates the period where the FED raised rates.

The grey area is where real estate investors traditionally fear the most because they believe higher interest rates are negative for real estate.

As we see on this chart, the grey areas coincide with the period where the light brown bars are at their lowest. This make sense because as the yield spread narrows and the yield curve flattens, the FED raised rates to make borrowing more expensive, to prevent the markets from overheating.

In the three notable periods where FED hike rates, the real estate and equity index did well together 2 out of three period. During the 1999 period, real estate did not do as well.

The main lesson learn here is that while higher interest rate puts pressure on the real estate business, other factors might matter more than just interest rates.

16. The Explosion of Debt Issuance in Asia and EMEA

This bar chart shows the debt issuance over time. What fascinates me was that, while more money was raised over time in America, the amount of capital raised in EMEA and the Asia Pacific grew by a crazy amount after 2010.

Once again, this article is a guest post and was originally posted on Kyiths profile on InvestingNote. 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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4 SINGAPORE DIVIDEND STOCKS WITH INCREASING DIVIDENDS FOR THE LAST 10 YEARS. THIS STREAK COULD CONTINUE IN 2020 (Guest Post)

4 SINGAPORE DIVIDEND STOCKS WITH INCREASING DIVIDENDS FOR THE LAST 10 YEARS. THIS STREAK COULD CONTINUE IN 2020 (Guest Post)

It is pretty rare for Singapore stocks to have a consistent track record of paying dividends. Unlike in the US where there are hundreds of companies classified as Dividend Aristocrats (companies that have increased their dividend payments for 25 consecutive years or more) and a handful of Dividend Kings (companies that have increased their dividend payments for 50 consecutive years or more), Singapore stocks typically do not have a good track record of consistent dividend payments.

4 Singapore dividend stocks with increasing dividends for the last 10 years. This streak could continue in 2020

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan.

https://newacademyoffinance.com/singapore-dividend-stocks/

(For those interested, you can check out the site for the graphical representation of their dividend track record)

It is pretty rare for Singapore stocks to have a consistent track record of paying dividends. Unlike in the US where there are hundreds of companies classified as Dividend Aristocrats (companies that have increased their dividend payments for 25 consecutive years or more) and a handful of Dividend Kings (companies that have increased their dividend payments for 50 consecutive years or more), Singapore stocks typically do not have a good track record of consistent dividend payments.

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Suntec REIT’s Annual Report 2019: A Quick Summary

Suntec REIT’s Annual Report 2019: A Quick Summary

Some insights of Suntec REIT’s portfolio, Tenants and Net Property Income from their annual report and key pointers to take note.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 886 followers.

Fountain of Wealth – Suntec City , Singapore | PLACES-CITY

 

Suntec REIT (SGX:T282U), another long-term investment of mine, released their annual report for the financial year ended 31 December 2019 last Thursday (09 April 2020.)

I have gone through the report, identify key pointers to take note of, and am going to present them in today’s post for the benefit of those who do not have the time to go through it:

Suntec REIT’s Key Figures in FY2019 at a Glance:

  • Net Property Income: Decreased 2.0% year-on-year (y-o-y) to S$236.2mil due to the sinking fund contribution from Suntec City upgrading works (excluding it, the Net Property Income would be 1.3% higher y-o-y)
  • Distributable Income from Operations: Increased 3.9% y-o-y to S$236.7mil due to increase in contributions from Suntec City, Southgate Complex (Australia), MBFC properties, and contribution from 55 Currie Street (Australia)
  • Distributable Income to Unitholders: Down by 1.5% y-o-y to S$262.7mil as increase in distributable income from operations was offset by lower capital distribution
  • Distribution Per Unit: Decreased by 4.8% y-o-y to 9.507 Singapore cents/unit due to the enlarged unit base and lower capital distribution
  • Portfolio Occupancy: 98.7% (office), 99.1% (retail)
  • Aggregate Leverage: 37.7% (31 December 2018: 38.1%)
  • All-In Financing Cost: 3.05% per annum, with approximately 75.0% of their debt fixed or hedged
  • Weighted Average Debt Maturity: 3.1 years

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Mapletree Commercial Trust – Why Did I Invest in the Blue Chip REIT? (Guest Post)

Mapletree Commercial Trust – Why Did I Invest in the Blue Chip REIT? (Guest Post)

Mapletree Commercial Trust had been in my “shopping list”, and a drop in its unit price of late presented a golden opportunity for me to add it to my long-term investment portfolio – which I did last Friday (03 April 2020) when the REIT’s unit price fell to my intended entry price of S$1.57.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 834 followers.

Where to shop in Harbourfront and Sentosa - Visit Singapore ...

 

Mapletree Commercial Trust (SGX:N2IU) was one of the “casualties” of the ongoing Covid-19 outbreak in Singapore, where its unit price took a huge tumble by 34% at the time of writing (it fell from its 52-week high of S$2.48 to S$1.64.)

This “blue chip REIT” had been in my “shopping list”, and a drop in its unit price of late presented a golden opportunity for me to add it to my long-term investment portfolio – which I did last Friday (03 April 2020) when the REIT’s unit price fell to my intended entry price of S$1.57.

In my post today, I will be sharing with you reasons why I’ve invested in the REIT.

Let’s get started…

 

Brief Introduction to Mapletree Commercial Trust

Mapletree Commercial Trust was listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 27 April 2011, and subsequently joining the benchmark Straits Times Index (STI) on 23 September 2019 (taking the place of Hutchison Port Holdings Trust.)

At the time of writing, the REIT’s properties in its portfolio are all located in Singapore, and they are:

  • Vivocity
  • Mapletree Business City
  • PSA Building
  • Mapletree Anson
  • Bank of America Merrill Lynch Harbourfront

 

Historical Financial Results of Mapletree Commercial Trust between FY2011/12 and FY2018/19

One of the first things I look at before I invest in any company or REIT is to first study its historical financial results (for at least the past 5 years.)

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Updates from Manulife US REIT & Prime US REIT (Guest Post)

Updates from Manulife US REIT & Prime US REIT (Guest Post)

Most of the REIT investors endure some extreme volatility in this March Madness. Their holdings have quite a good run in 2019.Coming into 2020, investors believe that the low rate environment is here to stay. Even when the threat of Covid-19 reaching the United States and Europe, investors rationalize that when the interest rate plunge, this must be a more conducive environment for the REITs. What comes next is that in a span of 2 weeks, many REITs saw their stock prices plunge 50%.

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 954  followers.

Most of the REIT investors endure some extreme volatility in this March Madness. Their holdings have quite a good run in 2019.

Coming into 2020, investors believe that the low rate environment is here to stay. Even when the threat of Covid-19 reaching the United States and Europe, investors rationalize that when the interest rate plunge, this must be a more conducive environment for the REITs.

What comes next is that in a span of 2 weeks, many REITs saw their stock prices plunge 50%.

Manulife US REIT and Prime US REIT both endure the same fate as their peers.

In the past 2 days, both REITs provided some updates to analysts, so as to address the potential uncertainties of investors.

Since then both REITs saw their share price go up 20-25%. Manulife’s share price held up better, probably because they are in the Index and are much more liquid.

Their transparency may have worked wonders for their share price. However, overall, a lot of the REITs managed to bounce off their lows.

Here are some updates that I have gathered.

 

Possible Reasons for the Sharp Price Falls

Management updated that possible reasons why the draw down was so swift was due to

  1. Manulife’s entry into the index. When index funds, exchange-traded funds systematically sell down, there isn’t many fundamentals per se
  2. There was a lot of margin calls from the Private Banks (my friend KK from RisknReturns mentioned a few days ago that the three US Office REITs may have been removed from the list of marginable stocks on private banks)
  3. Funds redeeming and switching around. They are switching from smaller stocks to more liquid stocks
  4. Ultra-rich Chinese are facing heavy margin calls (we can guess who they are). Manulife US REIT does not have them on their register

 

Are Manulife US REIT’s Properties Affected?

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