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.

SingTel

 

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

June 2020 Updates

June 2020

Portfolio Value after market close

S$129,668.98

Wifey's Portfolio Value after market close

S$83,003.98

Purchase

3,000 shares of SingTel @$2.48

Sold

None

Dividends

1) Netlink NBN Trust @ $202.40

2) OCBC @ $146.72

3) MLT @ $153.95

4) MNACT @ $19.84

5) ESR Reit @ $50

Short-Term Transactions

None

Summary

Local market turned green after two days of red, reflecting the continuous tussle between the bulls and the bears. Took the chance to add a small position.

Received a total dividend of $572.91 this month from Netlink NBN Trust, ESR Reit, MNACT, MLT and OCBC.

Portfolio value increased slightly with the addition of another 3,000 shares of SingTel, bringing my holdings to 8,000 shares.

Remaining funds will be used to focus on the three counters identified previously and another three which I am monitoring closely every day.

SingTel

Have been monitoring SingTel for awhile and noticed it has been well supported at the $2.50 region. When the share price dipped below the level I took the opportunity to enter a small batch to average down.

At this price point, I'm comfortable to hold it in my long term income portfolio.

If dividend payout remains depressed at 12.25 cents, yield is about 4.9%. Still good enough for me to collect while waiting for SingTel to rebound.

Bharti Airtel's spectrum charge is finally settled and Amazon is speculated to be eyeing a $2 billion stake in Airtel.

Key Thai associate AIS is also recently ruled not liable to a $324 million claim.

With these issues out of the way, the management can finally focus on the business proper.

I suspect this year and next will see a turnaround in SingTel's fortune with the digital bank license* and sale of Optus assets as possible catalysts.

Returns from the latter will prove useful for the 5G CAPEX.

SingTel has a history of gradual dividend increment over the last 10 years even without factoring the occasional special dividend.

If the payout reverts to 17.5 cents, my yield against average cost will be around 5.4%.

The reverting of payout to 17.5 cents is not far fetch considering the total payout is much within their free cash flow and the cutting of dividend this year is due to prudent measures.

I wrote a short piece on this in last month's update too.

Furthermore if the Optus deal indeed goes through, it will generate close to $1.9 billion for SingTel. Just to put things into perspective, this amount can easily maintain the 17.5 cents dividend for the next few years not to mention the possibility of a special dividend.
 

* Talking about the digital bank license, up to two full licenses will be awarded by this year. However I suspect one of the licenses will go to the consortium including Heliconia.

Reason is because there is Heliconia if you know what I mean.

If I am right about this, that leaves one other license to be competed by the other contenders among which, I feel the partnership between Grab and SingTel stands a good chance considering their existing platforms and current endeavours in using digitalisation.  

Singlife

I have also signed up for a Singlife account this month to take advantage of the 2.5% interest rate for up to $10,000.

Signing up is easy and relatively fuss free.

Interest rate is higher than banks' and the money deposited is protected by SDIC so no brainer here.

At this point of writing I have already earned an interest of $14.94. Not bad considering it's less than one month.

Work

On the work front, business is starting to pick up slowly. I'm seeing new enquiries and a previous potential project has resumed discussion.

Hopefully the economy recovers soon.