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2015 full year income from S-REITs.

Saturday, December 26, 2015

I did not do anything substantial to my investments in S-REITs in 4Q 2015. I just collected dividends, mostly.

However, it seems that I would be receiving less income from S-REITs in the not too distant future as Saizen REIT looks likely to be delisted as a firm offer of $1.17 per unit was received from a potential buyer.

Saizen REIT is currently one of my top three investments in S-REITs. Off the top of my head, it contributes to around 20% of my passive income from S-REITs.

So, losing Saizen REIT will greatly impact my income level in future, for sure.


Readers who have been following my blog since its inception in 2009 will remember that I was, back then, already a strong proponent of investing in Saizen REIT for income (and for its very cheap valuation).

Needless to say, I ate quite a bit of my own pudding.

So, I have grown somewhat attached to Saizen REIT after so many years. It is like having a good son who has been giving me regular and meaningful pocket money.

Now, this good son is going to give me a lump sum payment which is not a bad thing either but on the condition that there will be no more pocket money in future.

I just have to make sure that I remain financially prudent, I guess. Of course, there is no guarantee of this. Stress...

15A Changi Business Park Central 1.

Did I do anything at all in the S-REIT space?

I did increase my exposure to Soilbuild REIT by about 15%, taking advantage of the weakness in its unit price. I was waiting to see if Mr. Market would sell to me at an even lower price than 73c a unit but it didn't happen. Not for me, anyway.


However, 73c a unit was a fairly good deal and it is still lower price than the additional investment I made in the REIT back in August when stock prices plunged badly. That was 75c, if I remember correctly.

Including Q4's income distributions from my investments in S-REITs, my 2015 full year income from S-REITs is: S$90,344.81

This works out to be about S$7,528.00 a month.

I will be blogging about my investments in non-REITs next week. If you are interested, look out for it.


Related posts:
1. Saizen REIT: A firm offer.
2. Soilbuild REIT: A nibble.
3. 9M 2015 income from S-REITs.

24 comments:

Dividend Knight said...

Hi AK,

I always look forward to reading ur yearly review.

I guess it is time to search cautiously for another stock to replace the space left by Saizen REIT.

Merry Christmas! :)

apex property investment said...

Notice a fall in income since 2013. What is the main reason for this? Can stock investors continue to expect a regular income stream?

AK71 said...

Hi DK,

I am glad you enjoy the blog. :)

It is not easy to replace an investment like Saizen REIT partly because it is a big percentage of my portfolio but I guess I will just have to try.

AK71 said...

Hi Apex,

If you have been reading my updates on my income from S-REITs, you will find the reasons. If you have missed those updates, you can find them using the "Search" function in my blog. ;)

Too much to repeat lah. ;p

Girish Sheshagiri said...

HI AK,

offlate i've been following your blog regulary.
impressed with you REIT returns..will continue
to follow you and eagerly waiting to hear more
from Horse mouth.

thanks
Girish

AK71 said...

Hi Henry,

Specific numbers are not really important.
Having capital is only part of the formula. The price we pay for our investment is also an important part. So, we could have a lot of capital but if we overpaid, we might not do very well. ;)

Best wishes,
AK

----


[Hide Quoted Text]
Hi AK​

I am impressed by how much dividend you made in a year. May I know how much
capital do I need to generate the same amount of dividend like you ?

Thank you and Regards
Henry

AK71 said...

Hi Girish,

Oh, don't follow me. I am not always right. -.-"

Alamak, I am not a horse. I am a pig...

AK71 said...

Hi Henry,

If you are interested, you would have to do some forensics. It's all in my blog. ;p

I don't think questions about my capital size or investment yield are important. What are important are my philosophy and the processes as these can be universally applied. :)

Best wishes,
AK

---
[Hide Quoted Text]
Hi AK

What is the average yield that you are getting ?

Best Regards
Henry

Cory said...

Hi AK, is the fund entirely yours or include relatives etc ...
I just find the dividends HUGE !

Cory

1871e1fc-10c3-11e5-a794-7f9fad27c9b8 said...

I m looking to replace Saizen with AGT or CRT, JPY mah, but AGT
keeps falling leh. *shrug*
Will wait to see AGT results for next 1/2, hopefully Saizen sale
goes thru n receive the monies to buy AGT or CRT.

FC

AK71 said...

Hi Cory,

These are my own investments.

I manage some investments for my parents and siblings too but those are not part of the numbers here.

AK71 said...

Hi FC,

The sale of Saizen REIT's assets would most likely be successful. :)

As for AGT, I bought more at 51c a unit and I would probably buy more if its unit price should experience another significant decline. ;)

Darren Lee said...

Hi Henry,

I surmise that his S-Reit portfolio is worth about $1.2 million and non-S-Reit portfolio stands at around $1.5 million, which gives a grand total of $2.7 million. Well, let's say $3 milion. He has about $800,000 in cash and fixed deposit.

CWWL said...

Dear AK,

I would like to ask a question a bit off topic, but still about REITS.

When the REIT has any corporate actions like Rights Issues, and I'm overseas on holiday. What can I do?
Missing a rights issue would really suck as it's a great opportunity and turning point in many cases, so I was wondering how do I counter such an occurance?

Jax Woon said...

Hi AK,

May I ask whether you would sell all your investments if the capital gains are big enough? Do you set some sort of rule that tells you to sell off your investments if the gains are say more than 3 times the annual total dividends?

I'm always torn between continuing to collect dividends yearly versus just locking in the capital gains immediately. After all, if we could collect 3 years of worth of dividend today, why wait? Isn't money in the pocket today worth more than money in the future?

Or would you say that a person adopting this strategy runs the risk of not being able to find better investments once he sells?

AK71 said...

Hi Darren,

Alamak. I really don't think I am worth that much lah. ;p

AK71 said...

Hi CWWL,

Call your broker and ask for help! No, I am not joking. :)

AK71 said...

Hi Jax,

If I were investing for income:

1. I would sell if I feel that the investment is no longer doing what I expect it to do.

2. If I could find an investment that could do a better job.

I won't sell just because the price has gone up if I were investing for income. :)

CWWL said...

Dear AK,

I've thought of calling Broker as an option, but wouldn't there be high commission charges?

Might not be very value for money if I'm a small time investor

AK71 said...

Hi CWWL,

Sometimes, it is OK to pay higher fees for peace of mind. :)

AK71 said...

The manager of Soilbuild Business Space REIT, has announced the launch of an issuance of about up to 94.4 million new units in Soilbuild REIT through a preferential offering exercise to its existing unit-holders.

Each unit is priced at 63 cents, representing a discount of 8.2% to the volume weighted average price of 68.65 cents per unit for trades on Thursday.

When completed, the offering will raise gross and net proceeds of $59.4 million and $59.2 million respectively.

The group says that the net proceeds raised will be used to partially finance the proposed acquisition of Bukit Batok Connection. The total acquisition cost, including acquisition- related expenses, is expected to be about $100.5 million.

Lim Chap Huat, Executive Chairman of Soilbuild Group, has committed to take up his pro-rata entitlement, and to undertake to apply for any excess unsubscribed new units, up to the limit of 29.3% of the total issued units following the Preferential Offering.


Source:
http://www.theedgemarkets.com.sg/sg/article/soilbuild-reit-raise-594-ml-through-preferential-share-offering

Notes:
1. Issue of 94,353,672 new units in Soilbuild REIT on the basis of 1 New Unit for every 10 existing units in Soilbuild REIT.
2. Initial annual rental of 2 Bukit Batok Street 23 is $8 million.

Solace said...

preferential offering exercise, so no trading of rights.

theoretical price after all the preferential offering is about 67.5 cts. Which will not be too much of dilution. Current price is about is 68 cents.

I have a long position at 67 cents. Will apply for my rights and excess rights.

With gearing at about 36%, perhaps it makes more sense to do this preferential offering than to increase its borrowing.

AK71 said...

Hi Solace,

I will be accepting my share and will try for more too. I like buying a fairly priced building that generates a meaningful level of income which has visibility for many years to come. :)

AK71 said...

Soilbuild REIT has recorded a DPU of 1.399c for its 3Q 2016.

“The challenge remains to improve occupancy rate in this subdued market while maintaining existing leases”, said Teo, CEO of the REIT’s manager on 12 October.

15.3% of its leases are expiring in the 2017 financial year. Gearing for the quarter was 36%, with a weighted average all-in cost of debt of 3.42% as at 30 September 2016.

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