Dec 19 Portfolio update and Achieved 2019 Target of $31,000

For year 2019 I have achieved my target set here , dividend + realised gain is around $45,000.

Since my last post,
I had reduced my holding in FLT to lock some profit, disposed Fortune REIT, FCOT, MNACT and IREIT. From those capital I channeled into  CRCT, EC World, AREIT, KORE, Manulife, AIMS Reit and Landlease.

Following is my current portfolio based on market value percentage

Stock	Allocation
First REIT	38.38%
FLT	16.70%
CRCT	11.75%
AIMS Reit	10.08%
AREIT	7.08%
EC World	5.40%
Manulife	2.61%
KepPac	2.51%
Landlease	2.00%
PropNext	1.25%
Apac Reality	1.18%
IReit Global	1.07%

My current portfolio currently only yield around $29,000 in dividend and I intend to set next year target to have gain of $33,000 to $34,000 as per my plan toward for my passive income to cover my basic expenses in 5 years time. This will required at least $80,000 to $90,000 cash injection by aiming stock with 6% yield. I need to see if there is any opportunity to add to my current holding to increase my passive income from dividend. I am intending to add Bank and other non-reit dividend stock into my portfolio.

For my brick and mortar investment i have fully paid the loan and for my new venture, the 1st ship will be ready in Jan to start operation and any profit from it will be channel to the 2nd ship.

With this all set in place, hopefully i will have more war chest to start to build my dividend portfolio again.

Happy New Year 2020 for everyone and hope moving ahead be better year for everyone ^_^.

IREIT Q2FY19 Review

It has been almost a year since I last review IREIT result, I feel Q2 result for IREIT is positive as the manager bring a few positive results which summaries below

Munster South Building,

One of vacant floor since April 2017, finally the manager has manage to lease out with 8.5 years commencing 1 July 201. This will bring additional income and support to maintain current dividend.

Finance Cost

The finance cost has come down due to refinancing at the lower interest rate from 2% to 1.5% which bring additional income to the dividend as stated by the manager

"Income available for distribution increased by 3.3% YoY due mainly to lower finance
expenses post refinancing of borrowings in Feb 2019"

Lease

The lease profile has been extended from 4.2 years to 4.6 years with majority lease expire will start from FY2022 which give assurance to me for the dividend for another 2.5 years from now. 

CDL

With CDL come into the picture, I am looking forward for IReit to growth their portfolio to diversify their income which currently derived majority from their 2 key tenants.

Key Risk 

Tenant concentration

GMG (52.3%) a key tenant for 3 out of 5 properties and  Deutsche Rentenversicherung Bund (34.2%) a key tenant for Berlin Campus

Forex

Currency can be either good or bad for me, this is a natural risk I can't avoid as they operated outside Singapore. 

Frasers Commercial Trust (FCOT) Q2FY19 Review

The result is expected as there is no major development in Q219 and dividend is supported by $4.9m gain from the Gain on disposal of hotel development right. With this total of $27.2m out of $44m has been used.

Another bad news is Microsoft Operations Pte Ltd which contribute around 3% FCOT gross rental income has exercise option to per-terminate its lease in Alexandra Technopark and it will end by Jan 2020.

There are 2 AEI in progress

1. China Square Central that cost $38m
2. Central Park that cost $11.5m

Those AEI need $$$ which might explain the debt has gone up from previous  610m to 627m.

From the portfolio, filling 40% vacancy space in Alexandra Technopark will not totally help the gap, Total NLA is around 1m sq ft so 40% will be around 400k sq ft and multiply by rent based on slide 35 will just net around $1.5m gross rental.

I am really guessing they will do some acquisition as I don't think the current dividend is sustainable as the management fees already paid 100% in unit and the gain of disposal left around $17m which might only last 3-5 quarters (Note the cash balance is around $20m)

Frasers Commercial Trust (FCOT) Q1FY19 Review and Google in talk with FCOT

Recently there is some news around Google in talk for 400k sq ft in Alexandra Technopark, As I currently I own some share of FCOT, this is a good news for me.

Now, lets look into Q1FY19 result

The overall gross revenue has been on the down trend quarter by quarter from $35m to $31m and the dividend still being supported by

1. Gain on disposal of hotel development right by $3.7m (Q1FY18 was supported with $1.9m)
• Total use from this gain to date is around $22.3m out of $44m
2. 100% Management Fees paid in unit (FY17 and before, portion of the management fees was paid in cash)

HP also did not renew 93k sqft space that expire by 31 Dec 2018 so Q2FY19 will be impacted by this event as well.

Based on the slides on the business park rent for city fringe is around $5.8sq ft so if the deal with Google does happen, then it will be revenue around $2m based on $5.8 calculation.

It will help to reduce the dependency for the dividend to be supported by gain on disposal of hotel development right.

Seem I will need to expect management might plan some acquisition to be able to maintain dpu payout and back to the day where management fee paid in cash instead of unit


The Gearing has went down from 34.7% in previous year to 28.4% this year as a result of the divestment of 55 market street. No major refinancing till FY20 and the current average interest rate is 2.97% and 90% borrowing fixed rate

For the occupancy, it increase from 83.4% to 83.8% compare to the previous quarter. I am expecting positive rental reversion for Singapore properties and negative rental reversion for Australia property plus the weakness in current AUD.

In summary,

1. DPU will remain flat in the next coming quarter supported by the gain on hotel development
2.  93k sqft space not renew will drag down the gross revenue in Q2 if item 3 below does not materialised
3. Deal with Google will off set some dependency on DPU to be supported by the gain on hotel development
4. Potential growth for DPU will come from China Square central retail podium which will increase from 64k sqft to 78sqft which is currently already 40% pre committed.
5. Potential acquisition in 2019

Year 2018 Review - The Challenging Year

Year 2018 Review,

Year 2018 is really not a good year for my portfolio which drag by First Reit which drop almost 30% from the high $1.4 in early Jan 18 to the current price less than $1. This was has been my worry but I react too late to reduce my holding, I manage to reduce 47,200 shares before it was start to drop where I was intending to reduce further 50,000.

I have also divested RHT which was my 3rd biggest holding in early 2018 which I glad I did as from the announcement that made so far, it does not seem the manager see the shareholder interest and keep delaying the deal without being able to do anything.

I have added additional $15,000 into my current portfolio which mainly come from the realized gain

My portfolio in term of market value drop about 10%  despite i added $15,000, excluding the injection my portfolio drop about 14%.

I manage to reach realized gain of $32,000 exceeded the target I set last year ($28,000)
 

Below are my current portfolio

Stock	Allocation
Frasers logistics and Industrial	29%
First REIT	27%
CapitaLand Retail China Trust	13%
Mapletree North Asia Commercial Trust	9%
IReit Global	8%
EC World	4%
Frasers Commercial Trust	4%
Apac Reality	2%
PropNext	2%
Fortune REIT	2%

I added 2 Non REIT for trying the new approach where while I waiting for capital gain, I will collect the dividend.

For my brick and mortar investment, I am left with around $25,000 to pay the loan which I will complete it by year 2019

There is a new venture for me in 2018 which one of the reason why i only manage to inject $15,000 into stock, This new venture will need few hundred thousand funding and hopefully it will start running latest before Q2 2019.

For Year 2019 Goal,

Based on my long term goal for my stock investment, I am targeting to achieve $31,000 realized gain in 2019 which I think I will achieve if my current holding is performing.

I am monitoring the below REITs to be added into my holding when opportunity arise
1. Mapletree Logistic
2. Frasers Commercial Trust
3. Mapletree North Asia Commercial Trust
4. CapitaRetail China Trust

I will try to add some stock which I think undervalue and paying dividend as well.

Happy New Year 2019 for everyone and hope moving ahead will be smooth sailing for everyone ^_^.