It was difficult to search for a single candidate to add. But I finally settled on one.
Suntec REIT: While Suntec REIT has a relatively low dividend yield of 5.6%, it has a monetisation story. For every strata office unit it sells or even an office building, it is DPU positive for unitholders.
I personally prefer if Suntec sells off its entire Singapore office portfolio. I believe if it happens Suntec REIT share price will go up by 50%. However, the REIT manager is unlikely to do it because of the fee structure where the manager is paid by the amount of asset value in the REIT and the total net property income (which excludes interest expense). So with more buildings, the Suntec REIT manager ARA/ESR gets a higher fee and it does not need to worry of interest expense. Currently, the REIT is better off selling off the buildings to save on interest to benefit Unitholders, but this will lower the fees ARA/ESR collects.
In my view, the manager is in a bind between doing good for unitholders and earning a higher management fee. ESR was the REIT manager voted out by Sabana REIT due to their supposedly value destructive ways in managing the REIT. It seems the same is happening in Suntec where the REIT manager is not acting in good faith for unitholders.
Every sale is a positive to Suntec REIT. If the non core assets JVs in MBFC and One Raffles Quay are sold, it will boost Suntec to be a top dividend REIT master in Singapore with the safest balance sheet.
I bought a few shares in PRIME REIT and sold my shares in Yanlord Land.
Below is the portfolio composition. I still have about 1+% of cash deployable. All in all, it has started to become a REIT profile because REITs are providing good dividends now due to the higher risk free rates demanded:
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