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.
- Lippo Mall REIT
- Capitaland Retail China Trust
- SPH REIT
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.