Portfolio update Dec 2017 [DD]


Just got started recently helping some loved ones to invest and keep track of their portfolio.

With more of my experience in REITs, I decided that I should help one of them buy some.

Here’s the maiden post and holdings.

  1. Lippo Mall REIT
  2. Capitaland Retail China Trust

Present portfolio IRR of 6.2%. Return multiples between 0.97 and 1.03 for the different counters. Portfolio return multiple averages out to 1.0.

Portfolio dividend yield is 6.4% which is within my comfortable range of 6 to 7%.

I might consider stretching to buy REITs which are 5-ish or 7-ish% yield, but need to be comfortable with the story behind it.

Rationale for choosing Lippo Mall REIT is its presently high dividend yield of 8.2% as of 30 Sept 2017.

Whilst headline yield is misleading, it is difficult explaining to a newbie so I decided to just invest a small sum in there.

I also invested in Capitaland Retail China Trust because I wanted exposure to China malls run by a reputable company.

The move on 5 Jan 2018 by parent company Capitaland to divest 20 malls predominantly in Tier 2 and 3 cities is a shrewd one.

I believe when the parent company cultivates some of the newer and better malls, it may be divested to the REIT. I hope that it will be at a fair price too and not at the expense of REIT shareholders.

Also read: Capitaland’s sale of 20 China malls

There are other China focused REITs like BHG REIT and EC World, but feel that CRCT presents a safer (i.e. lower) yield at present.

SPH REIT will be a core stock going forward because of it’s low volatility (price doesn’t swing high and low). Despite results for 1Q18 (ending Nov 2017) showing negative rental reversion, occupancy is still 100%.

On the whole, I like the low volatility.

I personally am not vested in any of these counters but DD is. I have other financial goals.

Nothing in this post constitutes investment advice.