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2013 full year income from S-REITs.

Thursday, December 26, 2013



On 15 September 2013, when I reported 9M income from my investments in S-REITs, I mentioned that full year 2013 will probably see lower income compared to full year 2012. 

This is mainly because I sold approximately half of my investment in LMIR (Lippo Malls) earlier this year and I have not made any substantial acquisitions in S-REITs since.

Please read:
LMIR: Divested 42.5% at 52.5c.

In fact, I recently divested about a quarter of my position in Sabana REIT as I moved funds into Croesus Retail Trust. Wondering why I did this?

Please read:
Added Croesus Retail Trust and reduced Sabana REIT.

Luz Shinsaibashi.
Taken with my little IXUS from my hotel room using 32x zoom!

For reasons I mentioned in my blog post of 15 September 2013, I will continue to be very cautious in adding to my positions in S-REITs. Definitely, if I feel that they are undervalued, I would buy more. Could this happen? Of course it could. Remember Saizen REIT in the middle of last year when its warrants were set to expire?

Please read:
Saizen REIT: Why did I buy? Would I buy more?

We might also get a hint that a REIT is undervalued if insiders suddenly become active in buying too. This happened with AIMS AMP Capital Industrial REIT earlier this year when its unit price declined enough to offer an approximately 10% discount to NAV.

Please read:
AIMS AMP Capital Industrial REIT: Nibbling with George Wang.

There could be opportunities for relatively compelling buys again in future. If they should present themselves, I hope I am lucky enough to spot them and brave enough to buy some. Until then, my portfolio of S-REITs might not grow.

Although it would be nice to grow my income from S-REITs, it should not be growth at all costs.

An apartment building in Japan.

So, my strategy for S-REITs is to stay largely invested for income while waiting for Mr. Market to make me offers I cannot refuse. This way, my war chest continues to grow and I will have the resources to do business with Mr. Market when he suffers from manic depression which he does from time to time.

So, what is my full year 2013 income from S-REITs?

Total: S$ 118,081.02

This is some 2% lower than the year before and I expect income from my portfolio of S-REITs in 2014 to be at least marginally lower due to the partial divestment in Sabana REIT this quarter.

Related posts:
1. 9M 2013 income from S-REITs and more.
2. 2012 full year income from S-REITs.

32 comments:

AhJohn said...

Congrates AK! Another good year.
Btw, still more interested about %

INVS 2.0 said...

Another painful moment for my eyes. 0.0

INVS 2.0 said...

Mine is only 10% of yours. :P

INVS 2.0 said...

Sorry, a correction in fact, only 1%. :(

AK71 said...

Hi Ah John,

I won't reveal that, for obvious reasons. ;p

However, for long time readers like yourself, I am sure a rather accurate guess could be made. :)

SnOOpy168 said...

Congratulations AK. You did it again.

AK71 said...

Hi INVS 2.0,

Pain? Oh, dear. :(

To be quite honest, I would like to be young again with all the knowledge I have now. Then, I would be sure to do all the right stuff instead of stumbling along.

Young people like yourself who are financially savvy have a priceless advantage! Time! :)

AK71 said...

Hi SnOOpy168,

Thank you. :)

Did it again? The nice thing about this strategy is that I didn't really have to do much in the last few years. ;p

Unknown said...

AK71, you're truly an inspiration!

Best wishes for 2014 and keep on sharing! Hoping that one day we can all achieve such massive passive income too.. :)

AK71 said...

Hi Unknown,

Thanks for the confirmation.

The purpose of blog posts like this is to inspire. It shows that regular people can achieve financial freedom too as long as we are willing to do the right things. :)

Have a fruitful 2014. :)

ryan said...

AK, congrats on another great year!
With LMIR down 20% from when you sold it off, is it a good time to enter again?

AK71 said...

Hi ryan,

Everything remaining equal, it should be safer to buy some now than earlier this year. ;)

However, everything did not remain equal especially since they did a share placement recently which could see DPU watered down as chances are that the money will be used to pay down debt.

I am interested in seeing whether they are able to maintain the DPU, post placement, which is approximately 3.5c per annum. This would give us a rather attractive yield of 8.75% at 40c a unit and 8.54% at 41c a unit.

If the funds raised are not used to enhance income, then, DPU is likely to fall to 3.1c or so per annum (since the placement was approximately 11% of the capital base). This translates to a distribution yield of 7.75% at 40c a unit and 7.56% at 41c a unit. Not so attractive then.

Stoical Keynes said...

Hi AK,

I would say it's a good year for you!

Sloshing through the snow,
Buying AIMS low
AK is making some good hay
Laughing all the way

Oh jingle bells jingle bells
jingle all the way
oh what fun it is to sell
LMIR at a high, hey!

With a rapidly expanding warchest, a 2% blip in dividends is probably a good trade-off? Anyway, I can forsee most households surviving quite well on $118k a year. =)

And here's my belated seasonal greetings: Hope you have had a good X'mas and all the best in the new year.

AK71 said...

Hi Stoical Keynes,

Wow! You are a song writer too? Thanks for this. Made me smile. :)

All in all, not a bad year although some might say it could have been better. I am quite contented as I count my blessings this festive season.

Wishing you a Merry Christmas and a bountiful new year. :)

d34af78e-43ac-11e2-aa43-000bcdcb5194 said...

Hi AK,

Very nice!

Gambatte for year 2014!

Tree

AK71 said...

Hi Tree,

Always happy to see a familiar name. Thanks and more power in 2014! :D

SGYI said...

Hi AK,

Your post never fail to inspire me. Thanks for always sharing with us.

May 2014 be an even better year. Cheers!

AK71 said...

Hi SGYI,

I am realistic about 2014 and I expect headwinds for my portfolio of S-REITs especially when it is heavy on industrial properties. However, it should deliver on my expectations. So, I am not overly concerned.

I hope that investments in selected stocks which I am going to blog about next will do better so as to pick up the slack.

A better 2014? I hope so. :)

Small Time Investor said...

Hi Ak71

will your upcoming stock picks include first reit :x for 2014?

i think 2014 would be a good accumulation year for reits with careful plans .

Yes fed taper is cycling with small bits of taper through every of their meeting..but it is also a caution as we will not know what will happen along the line .

Lastly as always , an inspired post from you ! Happy 2014 Huat ar !

Small-Time Investor.

JCK said...

Congrats on another good year.

Cautious about the market as a whole.....DJ at record highs and all.

A correction is probably in the air

AK71 said...

Hi Small Time Investor,

I am glad you are inspired. :)

For sure, things are changing and that is the only constant in the world, change. However, if we stay focused and know what we want and what can deliver, we will be more or less OK.

I am working on a couple of new blog posts now. So, look out for them. ;)

AK71 said...

Hi JCK,

Thanks. :)

I don't know if a correction is coming. I don't know if the bull has legs.

I do know that I have to position my portfolio so that I will be able to benefit from either scenario. Hopefully, it is good enough. :)

EastCoastLife said...

Congrats AK!! Another awesome year for you. I am still learning, infancy stage. :)

AK71 said...

Hi ECL,

Kamsiah you. OK only. :)

You are an infant? I am a toddler, maybe. We learn to walk together. :D

boonchin.ng said...

Hi AK,

As always, I'm inspired by your blog post :) Your passive income from S-REIT is already more than my active income. Must learn from sifu :) Hope I'm growing my passive income from S-REIT slowly :P

Currently AIMSAMPI is rather a small portion in my portfolio, looking for great opportunity to buy more, perhaps below 1.4 might be a good opportunity (well still waiting).

And wish you a very happy new year 2014!

AK71 said...

Hi boonchin,

Oh, I am not a sifu. A kung fu panda (as described by a fellow blogger), maybe, but not a sifu. ;p

My investments must provide me with income and a peace of mind. I hope I am doing all the right things now to secure these.

Happy 2014! :)

allan Qk said...

Great AK. An inspiring role model for most of us.

AK71 said...

Hi Allan,

Inspire, I hope to do. Be a role model? I am not so sure. :)

There are many roads to Rome, after all. Put someone in my shoes and it might be too painful. ;p

opal said...

Hi AK and fellow readers,
I wish you a better and more rewarding 2014!
Most important of all, everyone is healthy and happy!! :)

AK71 said...

Hi opal,

Thank you! Yes, everyone be healthy and happy! Most important. :D

boonchin.ng said...

Hi AK,

Wish you a bountiful 2014!

With AIMSAMPI trading below $1.4 now, does this trigger your buying mode? :)

Or, you will wait for more discount to NAV (some 20%)?

For non-REIT, do you use discounted free cash flow? Still learning to figure out my own safety margin ... Thanks!

AK71 said...

Hi boonchin,

Happy New Year. :)

AIMS AMP Capital Industrial REIT? I think you will find my thoughts in this blog post:
AIMS AMP Cap Industrial REIT: Optus.

As for DCF, go to this blog post:
When to BUY, HOLD or SELL (Part 1)

Hope these help. :)

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