REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Sunday, October 16, 2022

Do You Still Profit if You Had Invested in All Singapore Reits Since Their IPOs (2022 Version)

It has been a year since the post - How Much would You've Gained if You had Invested All Singapore REITs since Their IPOs, which presented gains from Singapore REITs of an investor named Ah Nuah (lazy in Hokkien). Fast forward 1 year today, with the recent fast and furious share prices decline, is Ah Nuah's portfolio still in green?

Image by Gerd Altmann from Pixabay

A quick history for SREITs: the first REIT listed is CapitaMall Trust was listed in July 2002 on Singapore Exchange. Subsequently, Ascendas REIT was listed in November 2002, followed by Fortune REIT listed in August 2003. Throughout these years, there are 7 mergers between REITs and 6 REITs/BizTrusts delisted or suspended. Fast forward to today, there are 38 REITs and 2 BizTrusts which operate similarly to REITs.

Next, let's recap how Ah Nuah invests: 

  1. He subscribes S$ 5,000 to each and every IPO of REITs and BizTrust (which operates similarly to REITs).
  2. He gets the full allotment every time. 
  3. He never participated in any preferential offer or rights issue. 
  4. He never sold his nil-paid rights for profit nor consideration units after any mergers. Too lazy to follow the news, isn't he?

For the purpose of this post (to have equal weightage for each counter), rounding is not applied and foreign exchange is assumed to be constant at all times. Okay, let's look at his returns after all these years:
* Return is adjusted for 5 to 1 units consolidation, however, IPO price is not adjusted
^ Sold on the last day of trading

From the above, Ah Nuah has invested in 53 counters, which amount to S$ 265,000 capital. To date, he has received S$ 203,627.01 worth of dividends, equivalent to 76.8% of his capital. Due to delisted and suspended counters (which amount to S$ 35,000 of his capital), he has a realized capital loss of S$ 8,618.65. His current portfolio value is at S$ 222,666.12, with an unrealized loss of S$ 7,333.88. Below is a summary table:

Total Capital Injected $265,000.00 -
Capital for Current Listing $230,000.00 -
Current Value $222,666.12 -
Dividends $203,627.01 76.8%
Realized Gain/Loss $(8,618.65)-3.3%
Unrealized Gain/Loss $(7,333.88)-2.8%
Total Gain/Loss $187,674.48 70.8%

What are the best and worst performers to date based on CAGR? Let's see below:

Highest CAGRValueLowest CAGRValue
1Keppel DC REIT12.2%Eagle Hospitality Trust, USD-100.0%
2Mapletree Industrial Trust11.9%Daiwa House Logistics Trust-27.6%
3Croesus Retail Trust11.1%Digital Core REIT, USD-26.8%
4Parkway Life REIT10.4%ARA US Hospitality Trust, USD-19.3%
5Mapletree Pan Asia Commercial Trust9.7%Saizen REIT*-10.1%
6CapitaLand Ascendas REIT9.4%United Hampshire US REIT, USD-8.3%
7Frasers Logistics & Commercial Trust8.9%Prime US REIT, USD-7.9%
8Mapletree Logistics Trust8.2%Dasin Retail Trust-5.3%
9Frasers Centrepoint Trust8.1%Lippo Malls Indonesia Retail Trust-3.6%
10Mapletree North Asia Commercial Trust7.7%AIMS APAC REIT*-3.4%

Keppel DC REIT gives the highest CAGR, followed by Mapletree Industrial Trust and Croesus Retail Trust. However, he has lost 100% of the fund in Eagle Hospitality Trust, followed by Daiwa House Logistics Trust and Digital Core REIT. Let's refer below for the statistics of CAGR returns:

 CAGR RangeQty CAGR RangeQty
-5% and below82.5% to 5%9
-5% to -2.5%35% to 7.5%7
-2.5% to 0%97.5% to 10%6
0% to 2.5%710% and above4

There are 20 counters with negative returns, 16 counters with 0-5% CAGR and 17 counters with more than 5% CAGR. The ratio for loss and gain is 20:33.

Next, what if Ah Nuah only buy MACFK IPO counters:

*Frasers Commercial Trust is excluded as it was listed as Allco Commercial REIT initially, without Frasers involvement. 

** Lippo Mall Indonesia Retail Trust is included as it was listed as Lippo-Mapletree Indonesia Retail Trust where Mapletree Capital (a wholly-owned subsidiary of Mapletree Investments Pte Ltd) owned 40% of the manager -  Lippo-Mapletree Indonesia Retail Trust Management Ltd. In mid-2011, Lippo Karawaci Tbk acquired the entire 40% shareholding from Mapletree.

*** PRIME US REIT is included due to the 30% interest in REIT manager by Keppel Capital Two Pte. Ltd., a wholly-owned subsidiary of Keppel Capital Management Pte Ltd and in turn, wholly-owned by Keppel Capital Holdings Pte. Ltd. which is the asset management arm of Keppel Corporation Limited.

If he only invested in MACFK-related IPO, the capital would be S$ 95,000 and the total return would be 143.4%. Just the dividend alone is at 109.1%, which is more than his capital. The realized gain is S$ 1,424.19 and the unrealized gain is S$ 31,188.03. The total return in terms of % is double of investing in all the IPOs.

Image by Brigitte Werner from Pixabay

Anyway, despite the recent selldown, Ah Nuah's total return is still on the green side. Although his portfolio value has decreased by S$50k as compared to last year, he could still receive S$14k dividend per year from those current listings. Not bad huh? Yes, the share price could decline more from now given the next interest rate hike seems imminent now. Many would say is stupid to get the dividend in exchange for a paper loss because the paper loss would require many years of dividends to cover back. This is assuming the share price and dividends remain stagnant for "many years" as they mentioned.

In hindsight, it would be better to sell everything last year and buy back lower now. Well, Ah Nuah is not a good market-timer, and a lazy guy like him simply doesn't care how others judge him. Who knows, there might be some bunch of people calling him as Ah "Huat" at the back. Now, the thing is, are you a good market timer? And whether do you care what others say about your dividend strategy?

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Review - List of previous REIT analysis posts

And you could join the following to support my work:

Singapore REITs Post Telegram Channel - Join to receive posts for Singapore REITs

REIT-TIREMENT Patreon - Support my work and get exclusive content

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

REIT Investing Community - Facebook Group where members share and discuss REIT topic

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage due to the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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