NTT DC REIT IPO View and July Portfolio, Expenditure Update

July Update: Portfolio has grown admirably, in just a month, I have seen an increase of $50,000.

I have taken a small profit off Yangzijiang financial as it is reaching my target price. As a few of my stocks reach my own intrinsic value for them, I am now searching for new undervalued contenders, one of which is the recent IPO'd NCC DC REIT that I will talk more later.

Unitedhampshire US REIT has maintained its price at US$0.465.

Dividend Received

Year to Date (July received Alibaba Dividend)

USD: $3,760

SGD: $13,414.50

HKD: $28,000

Expenditure

I have stopped posting on my Maybank credit card expenditure because it has always been hitting the $800 mark  monthly, resulting in an achivement of 6-7% cash rebate.

NTT DC REIT Short Analysis

NTT DC REIT IPO at US$1 two days ago. Dividend wise, the REIT is guiding for 7.5 US cents.

Debuking the "Tesla" concentration in NTT- Investors have highlighted a concentration risk where 31% of the data centre's property is leased to one tenant, likely Tesla and is up for renewal in 2030. 

A few may be worried of the concentration risk, recalling what happened to Digital Core REIT largest tenant bankruptcy which slashed DPU by 2 cents; however this is different. Digital Core REIT's tenant was in the business of subleasing the space to others for data centre services. Tesla, on the other hand, is in the business of AI and automative segment and needs the data centre space for operational and expansion requirements. It is not speculative as Digital Core's. Hence in term at the stage of IPO, both REITs' risk profile is inherently different.

Possible Overcapacity of US Data Centre Space- This I acknowledge is a risk because too many data centres are now built worldwide. So let's see how this goes, but for now I am personally satsified with NTT DC REIT tenancy rate.

Sponsor- It is NTT, which to me, is as good as Keppel and Mapletree on the global stage so I have no worries. The only difference is most of NTT's REIT assets are in USA which is of lower valuation and occupancy rate compared to Singapore's. This is where Keppel DC REIT shines. This also explains why Keppel DC REIT's yield is at 4+% while NTT is now going at 7%.

With margin of safety, I am looking to buy it at US$1 or lower, because I want a 7.5% dividend on my capital invested. The IPO of this REIT is good in my view and anything US$1 and below is in the area of undervalued to me.

Currently the share price remains at US$1 due to negative sentiments surrounding US REIT + Singapore investors memory of Digital Core. In the foreseeable future as I sell off stakes in existing positions of my portfolio, funds will be channeled to NTT DC REIT. Part of diversification and my plan to increase dividends to $60,000. 

Portfolio Update June 2025: Add Lendlease, Sold Keppel REIT

Keppel REIT has been totally sold off, Lendlease REIT holding has doubled.

No dividend inflow. Dividend is on track to hit $50,000 this year, that's all to update. 

SG listed REITs are still Attractive

With local exposure REITs such as Lendlease going at 7% yield, it is a good value proposition. Low SORA rates are going to benefit due to lower interest expense, especially with liqudiity flushed in Singapore. 

I have never been a fan of condo investing when the yields are so low at 3-4% (before leverage) and investors are subjected to SORA + margin loans. Even operating on leverage, a condo investment now is less superior than that of owning REITs.

What's more, I am getting dividend inflow higher than what property investors get from rental income nett of Agent Commission, Singapore property tax and maintenance fee.

Comparision is simple, just use a $600,000 purchase of Lendlease REIT against a scenario of a $2 million condo which uses $1.4 million loan; mathematically, the dividend earn from Lendlease at $42,000 per year is higher than what condo investors get after netting off all the cost and government taxes.

So yes, I will continue to own REITs to earn a high annual dividend.

Dividend Received

Year to Date

USD: $3,682

SGD: $13,414.50

Portfolio Update end May 2025: Added UnitedHampshire and Lendlease REIT; $50,000 Annual Dividend

As per my thoughts, Lendlease REIT and Unitedhampshire US REIT are bargains. So I have used cash to purchase these shares. As a result, lendlease is a new addition in my portfolio. It is expected for full year 2025, my dividend received will exceed $50,000.

That is a restounding number and mainly thanks to the sell down in Singapore REITs despite the fact local REITs are facing declining interest expense. I am thankful for the market of offering the opportunity to accelerate my income accumulation.

I will continue to accumulate Lendlease REIT due to its 7% dividend yield in Singapore environment. 

Dividend Received

Year to Date

USD: $3,682

SGD: $13,414.50 (received from Yangzijiang Financial, Olam and Nanofilm)

Thinking Between Lendlease Commercial REIT vs UnitedHampshire US REIT

Following from my portfolio update, I am now stuck in a dilemma.

On one hand, while I am thinking to add UnitedHampshire US REIT (at 9% yield), I have come across a local REIT called Lend Lease Commercial REIT, it is a mid cap REIT which owns 02 Grade A buildings in Jem and 313@Somerset. Its occupancy in Singapore is a solid 99.9% with the Ministry of National Development being on a long term lease with rental escalations of about 2.5-2.6% annually. 

Lendlease Commercial REIT is currently at 51 cents with a dividend of 3.6 cents, giving it a 7% yield.

Why am I torn over it, Compared to my Current Holdings

Lendlease has a good 7% yield with very good assets in Singapore. In a way, barring recession, Lendlease is a dividend stock with growing dividends, its cost of debt is falling due to the falling Singapore SORA rate. I believe this stock will give 4 cents dividend in a few years time as interet rates keeps falling. (Lendlease cost of debt is 3.57%, while SORA is at 2.3%; likely lendlease cost of debt will fall to 3.2%). I expect lendlease DPU to be up 10% due to the falling SORA rates.

I am not bothered by the high gearing of Lendlease because the REIT is mostly backed by Singapore assets. As the saying goes, Singapore property prices will only go up or stay flat, the government does not dare to deflate property prices. 

On the other hand, United Hampshire US REIT has a lower occupancy rate but is in a totally income inelastic segment as opposed to Lendlease whose shop tenants are across the specturm (but of course not as many luxury tenants as seen in Paragon or Starhill Global REIT).

Strong Occupancy in Singapore and Improving Occupancy in Italy

Lendlease has a "building no 3" in Milan which it is trying to lease out after the return of the building by the main tenant. With improving occupancy, this will improve the net property income (NPI) of the Italy office complex.

Second, Lendlease has in built rental esclation for its Singapore Shopping malls and Office towers. This means higher NPI in time to come. This is why I foresee Lendlease will become a growing dividend REIT stock over time.

Extra Funds to Deploy for My portfolio

Right now, I am thinking between Lendlease REIT and Utd Hampshire US. The former has a strong tenancy and occupancy with a Singapore ministry being its largest tenant who will not default on its remaining 20 years lease. The REIT sports a 7% yield with a strong tenant base. On the other hand, if I take the latter, the tenancy profile is weaker and has exchange risk, the benefit is that I get a 9% yield.

The other thing I have to note is my portfolio concentration; with Utdhampshire being a large part of my portfolio, buying more of it puts me into a concentration risk.

Quite a weekend to think where to deploy my extra funds!

May Portfolio Update (2025): Little Movement, Changing Sing Dollar to USD to Earn $50,000 Annual Dividend

 Nothing much has changed in my portfolio except for the sale of a few shares in Olam and Alibaba.

With the weakening of US Dollar relative to Sing Dollar, I sense an opportuity to start accumulating more United Hampshire US REIT to grow my dividend.

Having researched the REIT thoroughly, I do feel it provides a significant amount of recurring dividend. In addition, as it is in the stripe mall and essentials goods area, tenant sales should not be adversely affecting with the looming price hike among US goods. I will be doubling my stake because a 9% dividend is something I will not miss and the cheap US dollar means my Sing Dollar is able to buy more of the same units.

With the accumulation, I may be creating a $50,000 SGD Annual Dividend Portfolio, something I would have found unachieveable, but thanks to the low prices REITs are going and the strong Sing Dollar, it has become real. With so many strong dividend stocks in both Hong Kong (Link REIT) and US (United Hampshire, possibly PRIME US), holding Sing Dollar and placing it in Singapore banks with low deposit rates is not a good value proposition anymore; its better to just change your money to Hong Kong or US Dollars to buy the dividend stocks avaliable in these countries. It will reap much more benefit than holding Sing Dollar.

Another stock I am evaluating is lend-lease REIT. It owns 02 Grade A buildings in Singapore with close to 100% occupancy and is of 7% dividend yield. Currently it's share price is at a low which makes it beneficial to own, of returns even surpassing what condo owners can own from renting out their property. Its largest tenant is Singapore's Ministry of National Development.

Dividend

Year to Date

USD: $3,682

SGD: $5,250

A Japan House Near Tokyo Costs Less than a Singapore HDB Flat of Same Travelling Distance, my Thoughts

I am not joking when I say this. Due to constant searches on housing in Japan, Facebook seems to be throwing its algo and think I am interested in a Japan property. So recently, they shared with me properties in Japan (Kawasaki City) going at USD$460,000 or about SGD$610,000 for properties of 50 mins travelling time to Tokyo Station and 50 mins to airport via train, of 1,100 square feet and a 2-3 years old house

If i were to extrapolate this to Singapore's context, it is akin to travelling from Woodlands or Sembawang area. While there is no data of 2-3 year old resale flat because Singapore law forbids the sale of such resale HDB, we do have data for 5 year old resale HDB flat of that floor area and in that area. 

A search on HDB resale transaction based on these parameters tells 5 year old HDB resales are going at SGD$680,000-$820,000. 

Fringe Properties in Tokyo Area are Much Cheaper than Singapore's and Why?

There are other areas of Tokyo too where like-for-like and travelling on public transport, their housing is cheaper than Singapore's. And unfortunately in Tokyo suburb areas, their property prices are not increasing much. 

For context, housing prices in Singapore has risen at a faster rate than Tokyo's. Why is this so? This is due to Japan's cultural reluctance to accept foreigners.

Due to this, the number of foreigners on long term pass and PR residing in Japan is extremely low at 3% vis-a-vis Singapore's 40%. While there are now foreign workers in Japan low-skill labour spectrum such as convincence stores or hotels; in proportion, it is still a small number. In short, the population trend of Japan has hampered Japan's housing prices.

Jap's population problem is so well documented and known that overall the population is declining. Adding of foreigners has not offset the local's attrition due to death. Far flung places of Japan have seen home prices going at a few hundred or thousand dollars because they are now abandoned.

Reversal of Singapore Populaiton Policy will Cause Property Prices to Crash and People Here to Suffer

Doing a "what if" Marvel like thinking, the question is what happens if Singapore becomes as inward as Japan and is not accepting of foreigners. The answer is simple: 25-30% fall in housing prices.

Japan has seen it and is trying to stem the residential housing price decline. If Singapore does it, the first order effect is there will be a wave of bad loans and DBS will have to massively impair its home loan portfolio.

I am not sure if MAS has stress test a 25% decline in HDB and condo prices, but based on current parameters, there will be a tremendous amount of equity top up required of home owners in Singapore. Consumption will fall and the second order effect is that those who had just received TOP for condo are likely required to pay 15% more via cash or CPF or risk themselves being declared bankrupt and lose the condo they had put their CPF in.

In short, Singapore can never turn back the clock because residential prices will collapse and many individuals who own two or more properties via leverage will be in a world of pain. 

<Not vested in Any Property But Just Thinking How our population policy cannot be reversed because It means the end of the Property Bubble here with Many Asset-Rich people becoming bankrupts>

China is now Very Much Worse Off with Trump Tariffs

 Contrary to what many market experts say, the "Trump Tariffs" is hurting China very badly. To combat the tariffs, China has devalued its currency to a near time low.

A currency devaluation means China's exports are now more competitive, however, it comes at a cost where China citizens have less purchasing power buying imports and travelling overseas is now more expensive. Sound anything similar? Yes, that is its another form of import tariffs. Hence for a tit for tat import tariff, China has imposed an addiitonal import tariff via currency devalulattion which is causing more pain for its citizens.

In a way, the USA started tariff war is now hurting both countries' citizens. It is likely China too is going to be in a world of a pain as opposed to what Xi jinping is painting.

What I am Doing

Unlike what a certain blogger is saying, the investment in China companies is painful, investing in alibaba or China tracker fund 2800,HK will be painful, Therefore, my view is we should not add in addiitonal stakes into China/HK HSI funds. Just stick to what you have and hold on.

Additional funds into them will hurt you. Do take "fin fluencers" advice with a pinch of salt due to their investments. Both China and USA will be going down the drain, not just one country.

<This post was penned down due to I noticing one online financial personality has been drumming up support for China which is beginning to be suspicious, Singapore government may not be doing anything but i feel it is contravening acts that Minister Alvin Tan may not have spotted.>