Friday 29 October 2021

Quick Review of My Portfolio (Oct 2021)

Found time to do some quick glancing and do a quick review for the counters in my portfolio since this is reporting season.

Mapletree Logistics Trust
MLT has always performed admirably since I first bought into them four years ago. The management is a forward-looking one with a record of shrewed yield-accretive acquisitions over the years.
This quarter is again an excellent one in my opinion.
Apart from the low 38.2% leverage which means much room for further acquisition and growth, I like that their average interest rate is low at 2.2% and their 5.2x ICR.

Mapletree NAC Trust

Results have improved over 1H last year.
I also like their low interest rate of 1.84% and their 4.1x ICR.
Yield is still above 6% against cost. 

Festival Walk's contribution to revenue and NPI remains below 50% which is good but can be better. A figure of ~25% would be more ideal.

This can be achieved with future acquisitions though investors ought to keep a close eye on the leverage which is pretty high at 41.4% currently.
One thing I noticed is that Festival Walk and Gateway Plaza continue to have negative rental reversions which no doubt will be a drag to coming results. 

Furthermore there is a possibility that a major tenant of Gateway Plaza might not extend the lease beyond December 2023.
With the visible hurdles ahead, i will probably maintain my existing holdings and not add further.

CapitaLand Integrated Commercial Trust

All metrics - revenue, NPI, portfolio occupancy & WALE, leverage, ICR, cost of debt, look healthy.
Clarke Quay's occupancy suffered due to government's regulations on nightlife. However I'm not too worried about this since this should be a passing phase.
Six Battery Road's relatively low occupancy rate is due to the ongoing AEI which I have covered in previous review. Again nothing to worry about as the AEI should be completed by end of this year.
CapitaSpring has achieved TOP for the office component. More importantly, they have achieved committed occupancy of 83.1% with another 7.2% under negotiation.
This is good to see as I was having some concerns on the occupancy rate of this property back in my May 2021 review.
CapitaLand China Trust

As mentioned previously, I like that Minzhongleyuan has finally been disposed. Though it's a small portion of the portfolio, it has been a drag for long.
I like that CLCT has gone into logistics and business parks right after getting the expanded mandate from unitholders.
The WALE by GRI and NLA for the business parks is relatively short at 1.9 to 2 years. This can be a double edge sword though if positive rental reversion can be achieved.

Yield is still above 6% against cost.
Upcoming quarters should see even better results with the addition of the 4 logistics assets.

ESR Reit
Performance this quarter is a good improvement over the last.

However if there is one metric that I don't like, it is their cost of debt which is high at 3.41%.

Another thing to take note of is the continual negative rental reversions (-2.2%).
It has been a busy quarter for ESR Reit with the divestment of non-core asset, a round of equity fundraising and inclusion into the FTSE EPRA NAREIT Global Real Estate Index.
The addition to the index last month is good news to existing unitholders as this will makes the Reit more relevant to funds and more visible to investors.
Of course the latest big news is the proposed merger with ARA LOGOS Logistics Trust. Honestly I have expected this ever since ESR Cayman acquired ARA Asset Management.
Overall I would say this merger makes sense considering the synergy and potential advantages from the enlarged Reit.

Suntec Reit
Good set of results driven mainly by their overseas portfolio with maiden contributions from Minster Building in UK.
Leverage is high at 44.3% which means less room for growth through acquisitions with borrowings.

Suntec City Mall continues to have negative rental reversions.

Suntec Convention continues to be a drag though quarterly loss has decreased.

Ascendas Reit

Continues to be one of the most well-run Reit in Singapore with constant portfolio rejuvenation through asset disposals and acquisitions.
Well diversified in terms of geography and asset type.
Good portfolio WALE of 3.8 years.

Netlink NBN Trust

Results will be announced on 3rd Nov 2021 after trading hours.

Results will be announced on 11th Nov 2021 before trading hours.

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