Monday, 24 April 2017

Dividend Knight Income Portfolio Update (April 2017) - Rebalancing Mode Activated


No.
Company
No. of Shares
1.
DBS
3, 000
2.
Singtel
15, 000
3.
AIMS AMP Capital REIT
30, 000
4.
Frasers Centrepoint Trust
15, 000
5.
SATS
6, 000
6.
OCBC
3, 040
7.
Raffles Medical Group
20, 094
8.
Mapletree Logistics Trust
20, 000
9.
ParkwayLife REIT
8, 000
10.
Keppel DC REIT
12, 800
11.
Frasers Logistics & Industrial Trust
13, 000
12.
Mapletree Commercial Trust
8, 000
13.
Frasers CentrePoint Ltd.
5,000
14.
Starhub
3, 000
15.
CapitaLand Commercial Trust
5, 000
16.
Straits Trading Corp
3, 000
17.
Sheng Siong
7, 000

 
Dividends received in April 2017: S$0

Total dividends received since Jan 2017: S$3, 635.02


Average dividends per month: S$302.92


Average dividends per day: S$9.96


Total portfolio market value: S$395, 755

Unrealised Profits: S$47, 276 (+11.95%)

Despite not receiving any dividends/distributions in April, it had been a rather hectic ‘portfolio rebalancing’ month for me. The percentage paper gains of some REITs in my portfolio have entered double-digits territory in recent weeks as another result season approaches. I was in a dilemma, torn between taking some profits off the table and just holding onto my current positions. In the end, I decided to fully divest Ascendas REIT & CMT. My capital appreciation in Ascendas REIT is equivalent to 2-year worth of distributions. Furthermore, the current price of Ascendas REIT is a huge premium over its NAV. CMT reported flat results last week due to the redevelopment of Funan Mall and negative rental reversions at Bedok Mall & WestGate Mall. I shall revisit CMT again closer to the completion of the new Funan next year when there should be new catalysts for DPU growth again. Besides, similar to Ascendas REIT, I get to reap the capital gains of nearly 2-year worth of DPU from CMT too.

A guru once said ‘when you see a quality company selling at a fair price, don’t be afraid to bet big on it.’ Well…..I spotted not one, but 4 such targets over the last two weeks, the ‘juiciest’ one being Singtel. Lucky me!

I made the biggest single trade in my entire investing life (serious >_<) by buying 5k shares of Singtel at $3.73. The price dip was caused by fears of increased competition from TPG in both the local and Australian telco markets. The remaining funds were then funnelled into smaller (but still significant) new positions in Starhub, Straits Trading Corp (STC) & Frasers Centrepoint Ltd. (FCL) I have been eyeing both STC and FCL for awhile now. After doing my homework, I decided to pull the trigger when they went Ex-dividend. I believe STC will reap the long-term rewards by investing in real estate ventures together with ARA & Warburg Pincus as strong strategic partners. Remember, the legendary John Lim is still leading ARA. As for FCL, I like the way it is steadily transforming into the next CapitaLand or even a ‘mini-Mapletree Investment’. FCL is expected to get higher recurring income from its significant stakes in FCT, FCOT & FLT, which brings me to my next point.....


Taking A Leaf From Mapletree Investments' Playbook
Last month, Mapletree Investments has closed a private trust to hold US$1-3 billion in student accommodation assets in the UK & US. It plans to close a series of private trusts and potentially launch Singapore's very first IPO of student-housing assets when the portfolio reaches $4b-$5b in the future. This trust is expected to pay an annual yield of 6% -7%, which is comparable to the 4 SGX-listed REITs sponsored by Mapletree.

Mapletree's strategy is to acquire assets on its balance sheet before seeding them into private trusts. Once the assets in the portfolio reach a large scale and stabilised, there is an option of launching an IPO. A private property trust is more cost-effective to set up and run. Maintaining a listed REIT also requires higher compliance costs due to recent stricter financial regulations. Mapletree's entire $40b-$50b AUM consists of properties in the office, retail, logistics, industrial, residential, corporate housing, serviced apartments and student-housing segments.  In my opinion, John Lim probably has a vision of transforming ARA into another Mapletree with the backing of Warburg Pincus & Straits Trading Corp. I want to ride on this opportunity by being vested in STC.

As small-time retail investors, I believe we are still able to emulate Mapletree by gathering stable income-producing real estate assets in the form of REITs over the long-term.



The expert in almost anything was once a beginner
DK