It has been a good quarter for the 6 REITs that I have. All of them reported stronger numbers and higher DPU for the past quarter. As every REIT provides a comprehensive presentation , I will not rehash the numbers. Instead, I will just highlight what caught my attention and my possible action going forward.
[average purchased price, position size]
Parkwaylife REIT 2018 Q4 [$2.39, 7.6%]
Another splendid quarter with recurring DPU up by 3.9%. Parkwaylife REIT has increased its DPU since it was listed 2007. Quite an amazing feat and it looks like this will carry on in the near future with its rental review mechanism. Based on the past few years, DPU growth is around 3%, so I expect 2019 DPU to be around 13.2 cents.
I have just added some in December last year at around $2.58, so would probably just hold on to my current stake unless Mr Market decides to hold a sale.
Fraser Centrepoint Trust 2019 Q1 [$2.06, 6.5%]
DPU up by 0.7% even though income available for distribution dropped by 1.0% after releasing part of retained amount from prior year. FCT has maintained an increasing DPU for the past 12 years even in 2017, 2018 when Northpoint City was undergoing AEI. I believe under the stewardship of Dr Chew, they have managed the internal cash flow and hence able to grow the DPU at a steady rate.
Dr Chew has announced his intention to retire by the end of 2019 and I suspect the year would end with 13th year of consecutive grow in DPU. Based on past few years’ DPU growth rate of about 1%, I think FY2019 DPU would be in the range of 12.1 to 12.3 cents. And because of the pending retirement, I also do not think that there will be major acquisition this year, so Waterway Point would have to wait.
With a high occupancy of 96.4% and positive rental reversions for many quarters, I am confident that the manager can continue to deliver in the near future. Hence, I will be holding on to my current stake.
Mapletree Industrial Trust 2018/19 Q3 [$1.99, 5.5%]
Bought MINT for its venture into data centre in US and it definitely disappoint as it contributed to about 7% of its distributable amount which probably plays a part in the increase in Q3 DPU by 6.6%. Its strategy of going into hi-tech buildings seems to be in the right direction too as they provide good rental support for new leases.
My initial position was bought at $2.11 last January but had accumulated more during last year as the price continued to slide below $2 and a position size that is slightly larger than what I am comfortable with for an industrial REIT. I am considering selling a partial stake to restore my 30% cash status.
Mapletree Logistics Trust 2018/19 Q3 [$1.29, 4.1%]
With the enlarged revenue and shareholders base after last year’s placement, MLT surprised with a 5% increase in its DPU for the quarter. Personally find it tough to analyze MLT due to its sheer size and the frequent divestment of its properties which contributed partly to its quarterly DPU. In any case, I think the manager is doing fine with their acquisition and rejuvenation of the portfolio.
Besides MINT, MLT is another REIT which I have bought at a high price ($1.37) initially. Fortunately, I was able to average down and bring it to the current price of $1.29. Currently have no intention to increase or decrease my current stake.
Mapletree North Asia Commercial Trust 2018/19 Q3 [$1.15, 4.1%]
The acquisition of Japan properties last May has contributed positively to its numbers. Coupled with positive rental reversion in Festive Walk, Gateway Plaza and Sandhill Plaza, its DPU is up by 3% over the previous year.
With a gearing of 39%, I suspect that there won’t be any acquisition in the near future. Next quarter DPU should be about the same and 2020 DPU should be around 7.8 to 8.0 cents. I might add more after I received the REIT dividend in February.
Mapletree Commercial Trust 2018/19 Q3 [$1.59, 3.8%]
Things continue to move smoothly for MCT with DPU up by 1.3%. Portfolio occupancy looks good and so expect MCT to dish out similar DPU for Q4 and beyond. I think that 2020 DPU would be around 9.3 cents.
It has been a fantastic quarter so far for REITs. Hope that this will continue for the rest of the year.
Towards Financial Independence 