With Manulife REIT making a surprise downward valuation which saw its leverage ratio increasing, US office REITs in the same industry and listed in SGX took a beating. I had used this opportunity to accumulate more in KepPacOak and PRIME due to their sell down, as investors might be spooked that they follow in the footsteps of Manulife US.
I do not foresee these 2 US Office REITs reporting a sudden downward valuation in their upcoming 1H results which will breach their loan conditions or regulatory limit. Valuation exercises are typically done at year end, barring sudden drastic changes in valuation in Manulife's case.
Similarly, I added more in Yangzijiang Finance due to its lowering in price by 1 bid. Through thorough evaluation of its business, I am optimistic of its execution as the credit situation in China's real estate should be improving. I added a new company in my portfolio called "Country Garden" who is one of the largest private property developer in China. Country Garden was chosen over the SGX-listed Yanlord as it is larger in size and caters to the mass market property segment in China
Increasing Dividends
With the accumulation of KepPac, Prime and YZJ Finance, my expected dividends received annually in the healthy range of 5 digits.
While that is good, PRIME reit faces the situation where shareholders might need to fork out cash for equity raising if its valuation goes down by more than 15%. Hence, I will need to keep some powder dry to guard against this.
No comments:
Post a Comment