Portfolio Update: Buying A Dividend Stock I Once Knew, Creating a 6% Dividend Portfolio

This week saw further deployment of my capital earned from Yangzijiang Financial. I bought Keppel Pacific Oak REIT at 21 US cents. It was bought for its future dividend where from 2026, KORE will resume its distributions.

Portfolio Composition

40% of my portfolio are now in US REITs, listed in SGX. While they are not strong beneficary of the $5 billion MAS funds, my thoughts is investing in them for their potential high yield earned far exceeds the need. Owning this dividend stocks are much better than owning Singapore stocks or buying a property on leverage.

As a result for 2026, the inflow of dividend should be approximately $60,000, giving a 6% dividend. Current total Portfolio Value is close to a million sing dollar.

Returns wise, since my challenge to property agents, United Hampshire US REIT has provided 2.5 US cents capital gain + 4.1 US cents in dividend. That is a 14.5% returns in less than a year. It is likely the REIT will be giving 4.2 US cents in dividend in 2026, which makes it a 9% dividend yield on current price.

Dividend Received Year to Date

USD: $3,682

SGD: $13,414.50

HKD:$7,100

Effects of US Federal Reserve Starting To Lower Rates, Share Price Growth for SGX Listed US Based REITs

A few hours ago, Fed Chair Jerome Powell on Friday gave a tepid indication of possible interest rate cuts ahead. The US Fed interest rate cuts will lower the SOFR rate that US borrowers on.

In Singapore, it will not translate to interest savings for most SGX listed REITs. This is because most of the REITs are on debts tied to the SORA (Singapore) and Japan's. As a matter of fact, SORA (Singapore's rate) has fallen faster than USA's. While USA's SOFR has not decreased by a single decimal throughout the year, Singapore's SORA has fallen by 1.5%.

Only Beneficary

The main beneficary are the US listed REITs because almost all their loans are tied to US SOFR instead of SORA unlike the rest. In time to come, we can expect the decline in US Federal Reserve Rate to benefit them.

KORE is the most sensitive to movement of SOFR because it has 24% of loans pegged to SOFR and the tightest margin spread due to a perceived stronger property portfolio. The magnitude of the fall in SOFR will result in a good percentage in extra cashflow for unitholder. Next in line is PRIME where it has about 34% tied to SOFR floating rates.

Good Time to Own SGX Listed US Based REITs

Declining SOFR means lower interest expense and in turn higher distributable income for unitholders. These are facts and not analysis. So it is definite such unitholders are going to benefit to a greater magnitude than those owning Singapore SG REITs.

To add to that, the USD dollar is at its lowest against the Sing Dollar, it is a good time for Singapore investors to mass swap the Sing Dollar to buy these assets when we have a strong Sing Dollar before it starts to depreciate again.

Higher Dividends for US Office REITs (except Manulife US)

This post will cover KORE and PRIME REIT. In recent times, these 02 REITs have posted results which shows their property portfolio are turning around. KORE has shown a slight decline in occupancy from 90.0% to 88.2%. And PRIME has maintained its occupancy at 80%. 

With this, it will point to a stabilisation of their property valuation which means an unlikely scenario of breaching leverage ratio above 50%. So what remains is when will their distribution resume.

KORE Resumption will Start From FY2026 Result

As per the title; this has been confirmed by the REIT manager, what remains is the proportion of payout ratio. From the wordings, it will definitely not be 80%/90% of the distributable income because this is the end state where the REIT wants to be at.

For PRIME, while the manager has not indicated increasing its payout ratio; management call has alluded that PRIME too is looking to increase its payout ratio from its current 10%. So the question is what is the ratio.

The CAPEX Problem 

Unlike the Singapore market, in USA commercial most of the tenancy improvement's cost are borne by the landlord. Therefore for every new lease/renewal, there is quite a hefty cash outlay that has to be upfront borne by the landlord.

For last year and this year, both REITs are forecasting a high CAPEX requirement of 45-50million to secure tenants to long term contract.

Operating Cashflow from Rental Growing

And to add to that, most of the new leases comes with rent free period of 3-12 months. This is why at current moment, both KORE and PRIME have reported low operating cash inflows because they are only earning about 70% of rental cash inflow from their properties. 

For KORE, due to the execution of 24% of its leases in the past 18 months, it has about 11% more of its portfolio coming online for rental income, while PRIME based on presentation has 10.5% of its portfolio starting to bring rental cash in. These are important data points. For KORE, this means after most of its new leases start to bring in rent, it will have operating cash inflow of about $82 million, while PRIME is at $76 million.

Counting it Backwards (CAPEX will taper off from 2026)

Both REITs will be incurring upfront CAPEX during last year and this year due to the need to secure tenants and backfilling. However, from FY2026, the CAPEX needs should be lower. In my projection, KORE would incur about 20 million in maintenance CAPEX while PRIME should be about 15 million. This is due to the relative ages of their properties. 

Expansion CAPEX should be lower because both REITs have higher occupancy rates. However, due to PRIME needing to backfill a larger vacant space and in turn needing to pay tenancy improvement, it is likely PRIME will spend USD$5 million more than KORE.

Hence in total, I assume both REITs have CAPEX needs of US$35 million for FY26.

Interest Expense

In KORE's latest annual report, it was able to refinance its new loans at slightly better margin rates. However, this was a small loan refinanced of US$50 million. That said, an advantage of KORE is its ability to secure better loan rates than KORE. 

In its annual report, KORE has been paying at rates of SOFR + (1.43%-1.66%), while PRIME's is SOFR + above 2%. Both REITs have approximately the same amount of debt.

KORE has been able to Refinance Debt at Better Rates

As a result on a full year, KORE's interest expense is US$26 million, while PRIME's stands at US$36 million.

Dividend Resumption

Judging from the cashflow, KORE will have about US$20-30 million in free cashflow once most of its new leases come online + CAPEX tapers off. Hence I forecast investors can expect to see about 2 US cents (US$20 million) dividend from KORE.

For PRIME, free cashflow should remain zero or negative due to its continous higher interest expense and still high CAPEX cash outflow to backfill leases. 

KORE is in a stronger position. This is because it has secured a narrower interest margin + SOFR as compared to PRIME. And the other positive for KORE is that it is in stronger sub office markets as compared to PRIME. For investors of these 2 Office REITs, higher dividends can be seen soon. But the question is what % will each of these REITs give?

Mid August Portfolio Update: Complete Divestment of Yangzijiang Financial

I have compeleted divesting Yangzijiang Financial shares. With the realised gains and initial capital, I have bought other companies such as Starhub and further increase in my position of Lendlease REIT. 

Lendlease REIT Higher DPU for Next 3 Years

The sale of its JEM office is DPU accretive because the interest saved outweighs the office revenue the REIT would have earned even factoring the 13% rental escalation. Second, with a lower leverage ratio, the REIT can start to use its bank borrowings of 3% interest to redeem perpetuals as and when they reach maturity. I expect 4.0 cents total dividend for 2026 & 2027 and 4.3 SG cents in 2028. Debt ratio will be about 44% once all perpetuals are exchanged to bank borrowings. Buying Lendlease REIT at up to 60 SG cents is attractive given the future dividend of 4.3 cents (7% yield)

Another divestment is Yanlord, keeping only a small amount of shares and a Partial sale of Asian Pay TV .

Dividend Received

LINK REIT paid dividend. So Year to Date

USD: $3,682

SGD: $13,414.50

HKD:$7,100

Asian Pay TV, Olam, Nanofilm, Far East H trust and Lendlease will only pay its dividend in Sept, so there will be another round of dividend inflow. 

Portfolio Composition

Alibaba remains the largest component but has dwindled due to the purchase of other companies. As of now, United Hampshire US REIT is the second largest. However, the third and fourth largest are PRIME and Lendlease with expectation of increasing dividends in the next few years. 

Most of my holdings are in REITs due to the thoughts that interest rate/expenses are coming down. A lower interest expense means a higher net profit and in turn dividend. Dividend Yield compression may happen too which leads to higher share prices for REITs.

This will enable my porfolio to earn a larger amount of dividend over the next few years.

United Hampshire US REIT- Strong 1H Result, Higher Dividend and 8% Dividend Yielder

United Hampshire US REIT (UHREIT) has released its first half results. The top draw is the REIT has maintained dividend in the 8% yield range.

Here's a summary of the results:

(i) Revenue down due to divestments

(ii) Distributable income increased by 4% to 2.09 US cents for the last 6 months

(iii) DPU Yield of 8-9% at current share price

Business segments of Grocery and Self Storage

On virture it is a REIT focusing on tenants providing basic essential services, its revenue does not fluctuate much. Occupancy rate has been strong staying at above 95%. The REIT leases have in built annual escalation which allows an increase of NPI per property.

Interest Expense

This is the main item which will determine the directions of its dividend. As of 1H2025, debt weighted interest rate is 5.13%, a decrease from 6 months ago. UHREIT debt profile is all pegged to USA SOFR and its swaps expire in end 2026, I expect 4 rate cuts from now to then, which will put interest at 3%. Hence, I expect interest expense to start lowering from 2026. This leads to.......

DPU Growth

With annual rental escalations and forecasted lower interest expenses from 2026, UHREIT DPU should grow from its current annualised 4.1 cents. This puts it at a high 8 to 9% dividend yielder. The recent acquistion of Dover Marketplace should result in a higher DPU as well. 

At 47.5 US cents, this is a steal and a stock to include to boost your dividend returns. It is a definite buy and I have a target price of 70 US cents.

Lendlease REIT Full Year 2025 Results: 3.6 SG cents Dividend, Increase in DPU expected

 Lendlease Global Commercial REIT (LREIT) has released its full year results. Overall, it is an expected results with:

• 3.6 SG cent dividend
• Sale of its JEM Office Space
• Slower uptake of Milan Office Tower 3, improvements need to be done to raise it to 80% from current 31%

Expect Higher DPU Next Year

LREIT has divested JEM office space at 3.5% cap rate. This is good because if LREIT uses the equity portion of the sale to redeem its 4.25 and 4.75% interest perpetuals, there is a few million dollar increase in distributable income. Further, LREIT cost of debt is now declining, factoring all these I expect next year DPU to be 3.7 SG cents with special dividend of 0.5 SG cent post sale of Singapore office complex.

At 57 SG cents, this translate to a 6.5% dividend yield, which is good. I expect further yield compression to occur until the 5% mark because the risk free SORA rate is declining. Target price is 74 SG cents.

Is it possible for LREIT to reach a target price of 74 SG cents?

The answer is a restounding yes. I feel there are 02 ways- (i) yield compression with the falling Singapore interest rates or (ii) a sale of the Milan office building at current valuation.

If the sale of Milan office goes through, LREIT will become a 100% Singapore mall Trust. And on SGX, we have a 100% SG retail reit which is priced at 1 times P/B with dividend of 5%; it is fraser centrepoint trust.

So it is easy for LREIT to reach 74 SG cents. 

 

Caveat

The sale of LREIT's office assets is indeed a good way forward, however I will like to caveat to LREIT manager that it should not be buying any more properties from the sponsor. And if it does, it should only be Retail singapore properties like PLQ mall or Parkway at a capitlization rate of 4.75% or more because such a situation means the 4.75% interest perpetuals will not be redeemed. A too low cap rate will be DPU negative to unitholders.

And if it is not a retail property, the chances of fulfilling a one times price book will not be achieved.

August Portfolio Update: Reinvesting Sale Proceeds

Saw 02 of my holdings reach its fair value and hence I have encashed partial stakes. Yangzijiang Financial was a big winner with a $100,000 in profits

Following up from my last month's view, I have bought NTT DC, United Hampshire US Trust, Fraser Logistics Commercial Trust, Far East Hospitality Trust and Asian Pay TV.

Dividend Prospects

As mentioned, NTT DC REIT has a strong portfolio with rental escalations and of course there is a risk that it will revise down its payout ratio from 100% to 90%. Therefore, it is safe to assume, dividends will stay at 7 to 7.5 US cents per year. However, it is still worth at current prices.

For United Hampshire and Asian Pay TV, it needs no introduction for they are dividend titans in their own rights (>8% dividend yield)

Fraser Logistics Commercial Trust (FLCT) is currently plagued with poor occupancy rates especially in Singapore. Singapore's property outlook is in fact weak with low occupancy rates contrary to what many Singapore property agents talk about. The main reason is due to the mismatch in asking rent and what tenants want to pay, resulting in a low occupancy rate. However, I am banking on the REIT to lower their asking rates to fill up their occupancy. ItThe REIT would maintain at least a 6 cents annual dividend. (>6% dividend yield)

Far East Hospitality Trust owns a few 4 and 5 star hotels in Singapore, with a rather healthy cashflow and I am branching out to gain exposure to Singapore's tourism industry (~6% dividend yield)

With the purchase of these shares, it is definite I will be getting cash inflow equivalent to SGD$50,000 per year. If PRIME US REIT reinstates a 90% payout next year, dividend may rise to SGD$60,000 range.

To me the current portfolio has a right mix of dividend and capital gains (mainly Alibaba is the provider for this aspect), I would be happy earning a 6% dividend portfolio with part of it banking on capital gains from the Hong Kong side. Many Singapore REITs are now priced at high yields that outbeat condo purchases in both capital and rental appreciation. 

United Hampshire US REIT

A shout out to this REIT. Since my post in Dec 2024, it has produced 4 cents in returns (2.05 cents dividend and 1.5 cents in share price gain). This netts a remarkable 8% returns in close to a year from the cost base of 45.5 US cents. The recent purchase of a property should raise its DPU by 1%. Definitely not better than doing unit buybacks but as passive investors we cant influence much; UOB wants to make more money so they will increase AUM instead of doing the better corporate action.

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.>

Portfolio Update April 2025- Addition of Olam; Buying Dividend Stocks in Current Period of Market Turmoil

Sold Petrochina and a few of Keppel REIT/ Asian Pay TV Trust during this past few days of "Tariff War Nightmare"

Added Alibaba, United Hampshire, Yanlord using the sales proceed. Alibaba was bought back because prices are below where I had made a partial divestment. As part of portfolio concentration, I will cap the total number of Alibaba shares I own to 15,000. Currently I own 14,700 shares.

A new stock of Olam was bought. A 7% dividend yielder due to the sell down in prices. It is similar to Keppel REIT sell down which made it attractive.

The portfolio is targeted to provide an average monthly dividend of $3,500 (5% yield on current portfolio of about $800,000). It has changed to that of a dividend-biased portfolio with some potential appreciation in Yanlord and Alibaba. 

While there is a global sell down to tariffs, I am buying into dividend stocks given they are now of higher yield. I do not expect many of their dividends to be adversely cut/

Dividend

LINK & United Hampshire US REITs are providing 7-8% dividend. Their tenant base sells relatively price inelastic goods comprising of supermarkets and essential good players.

Due to their resiliency and high dividend, I am confident owning these 2 REITS will place investors in a strong financial position in the current situation of trade war and economic contractions. Humans still need to eat and have essential groceries, these needs are met by the tenants of the above 02 REITs and hence their DPU will not be negatively affected to a great extent. I am confident these REITs are going to be great wealth accumulators in years to come, surpassing any Singapore condo investment. 

For Unitedhampshire, it may benefit from potential Fed Rate cuts and this places it to have higher DPU.

Unitedhampshire REIT and Asian Pay TV Trust dividend has come in, dividend collected year to date is: 

USD: $3,682

SGD: $5,250

Specially for United Hampshire US REIT, the current share price is US$0.445, so I am up 2.3% since Dec 2024, assuming a cost price of 45.5 cent in my Dec 2024 article where I stated United Hampshire will deliver better returns than big-sized condos in Singapore (this includes 2.05 US cents dividend).

HDB Resale Prices have Increased 50% in 5 years. Getting Unaffordable For Many Singaporeans and How We can Solve it to Benefit Housing Aspirations

HDB Prices have grown 52.7% from 1Q2020 (131.5) to 1Q2025 (200.9). That is a 52.7% rise in HDB resale prices. Like it or not, this is an unsustainable increase and is pricing many non home-owning Singaporeans out and affecting their housing aspirations.

Unaffordable and Making People not See Singapore as a Home

While Singapore has a cheaper housing scheme called the BTO and Balance of Sales, the number of housing applicants is overwhelming where people have not been able to get a home through this scheme despite the expanded supply; yours truly has experienced rejection letters from HDB more than the number of times I have been rejected by girls : p

Why has HDB Prices Gone to Unaffordable Levels?

Entirely my view, this is due to the influx of foreigners and their ability to pay a considerable amount for rental due to their lifecycle. This makes a HDB resale flat a great investment as dividend income.

For many foreigners or I would like to call sojourners, their time in Singapore amounts to about 20-30 years of their lifespan. During their 20s-50s, they migrate to Singapore to make money, squirrel aside savings for retirement at their home country (due to low cost of living and weak exchange rate) and then migrate back. Their expensive expenses (mainly housing) only lasts for 30 years.

Whereas for Singaporeans, post our age of 50-90, we are still stuck unable to move to another country (unless of course Singapore legislates a law to allow us dual citizenship). With double of our lifespan in this country, we are unable to bear the burden of a high accomodation cost for 60 years vis-a-vis foreigners of 30 years.

So back to the foreigner's life cycle, given they are only here for 30 years, they can pay up to 50% of their salary for rental expenses. This justifies why a 4 room HDB resale can be shared by 3 individuals at a monthly rental expense of $4,000. 

Maths wise, to an owner who is renting out a resale flat, a $48,000 rental income, netting off half a month commission and $6,600 in property taxes, a $1 million dollar 4 room resale flat still nets $39,300 in rental. That's a high rental yield and positive to an income statement given assuming a home interest loan at 2.6% interest.

$1 Million Resale Flat (affordable to investors but not affordable to Singaporeans who want a home)

As shown in the above example, to an investor, buying a $1 million resale flat makes good investment sense on the grand scale of things. Based on an LTV ratio of 70%, 2.6% interest for a 25 years loan tenure, an investor would need to make a cash outlay of $38,112 per year to finance his "investment" home, renting a HDB home out, an investor receives a cash inflow of $39,000 per month after property taxes and commission. 

At the end of the 25 years, the investor technically gets a home for free, only paying with CPF/Cash for 30% while paying nothing else; he/she can then rent for another 30-40 years, earning another cool $1 million in the process. It is a superb investment decision to use a HDB resale to earn money from foreigners.

However, to Singaporeans who are unable to ballot because of their income of say $15,000 per month, financing a $1 million resale flat is a financial disaster. An annual pay package of $195,000 (take home pay of $180,000) means 20% of their post tax income is used to finance a house. Of course, we know couples who are of slightly older age, earning less than $195,000 who does not wish to wait for a BTO and are buying such expensive resales so that they can have a home and family formation. Due to their circumstance, they are spending more than 20% of their income to actualize their housing and family aspirations.

The need to Equalize Difference between an Investor and Genuine Owners of HDB Flats

Simply based on finance, there is a difference beween an investor and genuine owners of HDB flats.

On one hand, investors find it easy to recoup gains utilising a HDB flat by renting it out. On the other, family owners due to them chasing the same unit of good, are killed financially trying for their aspirations. 

Solution

The simplest would be a return to the old pre-90s HDB policy where rental of HDB flats are not allowed for foreigners. However, the truth is that such a policy will lead to the destruction of property value and stress test will show banks such as DBS will collapse arising from underwater loans due to such a policy change. So stopping foreigners to rent HDB flats is a definite "no".

Alternative 1- Non Owner Occupied Property Tax Regime

Taxation is one of better policy measures, where non owner occupied tax rates should be increased. In my view, the current lower tier 12/20% taxation rate should be raised until mathematically investors of a resale HDB are in a worse off state than genuine owners of a HDB resale flat. My own back of the envelope calculation is that for E pass foreigners, they can afford up to 5k per month accomodation expenses based on a 15k post tax salary. This means Singapore has to formulate a property tax regime where it pains would be investors to stop investing in HDB resale.

Assuming (i) an interest expense of $18,000 on a HDB flat 25 years loan and LTV ratio of 70% for a 1 million resale flat, (ii) half a month agent commission of $2,000, idle cost of about $3,000 per year, the painpoint will only start when $34,000 out of the $60,000 rental income is taken out of the investment planning. This means $34,000 of the rental income should be deducted via taxation. Hence the lowest tier of HDB non-owner occupied should be set at 55% with the second lowest and thereafter set at 60%.

A reasonable non owner occupied HDB property tax should be as follows, which will benefit Singaporeans housing aspiration dreams while penalising investors of HDB resale:

Alternative 2- Accessible Housing to All Singaporeans for First Time Owning

Similar to what Ho Ching has suggested, all Singaporeans should have access to an HDB flat easily for their first time trying to purchase a home (with the only condition still limiting them to be the current monthly income limit). This means the government has to expand the BTO/ balance of sales supply to enable all Singaporeans are able to get a flat (singles or married and regardless of age) within 2 tries. This is due to the need to account for the fact there is a need to wait 4 years for it to be completely built.

This prevents would be genuine owners of HDB flat to compete with would be individuals who plan to use a HDB resale as investment.

HDB Should Not Be Used for Speculation or Investment, Otherwise if Investment is to Remain, HDB has to be Accessible to All Singaporeans

In summary, a HDB flat should be used to help Singaporeans achieve their housing and family formation aspirations. The current investment regime and alteration of HDB rental policies since 1990s have hurt us Singaporeans too much. There is an urgent need to restore parity between a genuine owner of HDB flat vs would be investors.

While a return to pre-90s rental policies is ideal, it would destroy the current banking sector dooming even DBS with under water HDB property loans. Hence, using the non-owner occupied property taxation is ideal. Second, adoption of the proposed taxation policy will help the government to get higher tax revenue and this eliminate financial budgetary headaches.

Otherwise as per alternative 2, all Singaporeans should have access to a HDB flat for the first time.

Look Beyond High Interest Savings Account, T bills/Insurance Policies; REITs and a few SGX companies Provide Better Yields with Low Risk

In recent meet ups, I have heard the lamenting that the reduction in interest rates of local bank's high interest savings and T bills have meant their money now compounds slower.

Safe but Very Slow

No doubt bank savings account are protected by the SDIC but due to how secured it is, the interest rates earned is fairly low.

In my view, Singaporeans should look beyond complete protection and stability. Taking some risk is needed to earn higher returns, it is a rule (pherhaps even law) in all investments. The rate of returns follows the rate of risk taken.

But That Dosen't Mean Taking Extreme Risk

That brings me to offering the solution of investing in stable companies that offer higher yields such as the local REITs (especialy Keppel and Capitaland [CICT]) and that of the 3 local banks. They are at 6.5% and 5% yield respectively.

No doubt there is risk involved, but my view is due to their systematic importance to Singapore's economy, the government will put a backstop in a severe economic downturn. Singapore neither wants to see a collapse of one bank nor a total selldown in City's area commercial office/retail space at 35% discount (like what is happening in China Tier 1 Cities). 

Should any of these situation happen, it will cause a downward spiral of Singapore's economy and a permanent loss of wealth for the rich of this country. Something the current government will not want to happen.

Hence while it is not a 100% chance they will be saved, it is likely a 95% chance; hence for some risk with a high degree of stability, investors can earn a much higher yield than what high interest savings, T bills or even insurance policies can offer.

Putting in Words the Solution

Therefore look beyond the realm of high (ironically now low) interest savings account and Singapore T bills, there are better options: the 3 local banks, Keppel REIT, local Capland and Fraser REITs; higher returns while investors take a low degree of risk.

Of course, people will point out that I do not invest in them (except for Keppel REIT) but that's because I wish to take higher risk on higher yield SGX stocks

Grab Full Year 2024 Results: Loss Making, Prepare to see Company Still Loss Making for 2025

 Grab Full Year Results is out and the company has narrowed its losses to US$158 million from US$458 million (page 4).

It is indeed good to see Grab continuing to efficiense itself. However, I think the company is not out of the woods.

Increase in Cost due to Mandatory CPF Contribution by Employer for Platform Workers

While the Singapore government will be bearing most of the cost during the next 3 years as transit, some costs is still borne by Grab, hence whatever cost savings Grab has been obtaining will be erased for Year 2025. 

I forsee its full year 2025 will still be loss making. Furthermore, with more South East Asian countries looking to protect its platform workers, costs borne by Grab in its Delivery and riding segment will rise.

This does not bode well.

Guidance

For FY2025, company us guiding for EBITDA gains of US$470 million, this is a gain from its current US$313 million, if we follow this, this means net income will improve by US$157 million. This means Grab will still be in loss making zone for FY2025.

Revenue Growth

Barring a recession, it is likely Grab will continue to grow revenue. But the truth is that the company is not reporting profits yet, which means growth in asset value. As of now, Grab has continued to make losses. Revenue growth has to grow at least 40% more before it turns profitable. And even if it turns profitable, its profits are minute compared to what Sea Group has obtained.

Grab is in lousy business segments which is cut throat and suffers from high labour unit cost as it expands. The ability to reap economies of scale is smaller as compared to e commerce companies. 

While Grab has a book value of US$2.79, I do feel eventually book value will grow but it will take a while. At price of US$4.40, it is overvalued by a mile. Only at US$2.79, would I consider it. For now, I would put it a mile away. This is an overvalued Tech company which is struggling to be profitable after a decade. A terrible company at present.

Spending for Feb 2025: Nearly Maximise Maybank Credit Card Cashback (7% cashback)

Spending Performance for Feb 2025

Total expenditure was $834 with $61 in cashback clocked (7.3% cashback). This is close to the best of my ability to fully utilise Maybank's credit card cashback system.

Grocery Spending

My basic neccessities spend remains high, of course this is due to the high cost of living in Singapore :p

This category's spending exceeds the cap Maybank has at each (per) category, however, I have been actively trying to cut my food ingredient expenses etc to ensure a minimalist lifestyle. Mirroring myself like a company, I am guiding for my recurring grocery expenditure (maintenance CAPEX) to be at $300-$350 monthly range.

Transport Expense

Transport will be at the $80 monthly range. Otherwise nothing to report and thanks to inflation, my expenses now allow me to utilise Maybank's Family and Friend's Cashback; previously hitting $800 monthly expenses was a stretch, now it is easier. Good thing or bad thing, its debatable. 

Fortunately due to my resourcefulness, I have cushioned the cost of living crisis with my skill set in the realm of credit cards.

<Non Sponsored Post on Maybank Credit Cards> 

UnitedHampshire US REIT - 11% Gains in 4 Months, Can The Gains Continue?

Since the 2 December 2024 post when United Hampshire US REIT was at 45.5 cents, the REIT is now at 48.5 cents and had given dividend of 2.05 cents. Investors who have bought it since then would have reap a 5.05 cents gain at a cost price of 45.5 cents.

That is a 11% return.

Will There be More Gains?

That is a yes. Despite the sale of 02 properties, the REIT has actively de levered. While its net property income will be lower this year, its interest expense will be lesser due to a lower leverage. Second with interest rates likely to be lowered due to the expectations of a declining US economy and incomptency of President Trump tariffs effects, I expect further fall in interest expense. Currently, the REIT's average interest rate is 5.17% with 26% of its loan tied to the floating interest rates.

Third, I expect the REIT manager to start taking units as part of its fees. So dividend should remain at 2.05 US cents per half a year and 4.1 US cents per year.

How about capital gains? Well as the market continues to appreciate the sustainability and strength in dividends provided by UtdHampshire, a re-rating will happen resulting in capital gains. My view is that this REIT deserves to be a 6% dividend yielder. Further, with escalating rents received each year, DPU will only rise from 4.1 US cents. In its hey days, this REIT was a 5.88 US cents yielder. However, I think this will be a stretch to regain its old times.

Target Price

I expect UtdHampshire US REIT to give 4.5 US cents dividend in 2026. At 6% yield. this values it at 75 US cents (it should be 64 US cents in 2024). This is a 50% upside with recurring dividends of 8% gains. It is worth buying the REIT and surpasses buying any Singapore property (for rental+ capital gains) even on leverage.

Asian Pay TV: Sustainable 1.05 Cents Dividend, a 13% Dividend Yielder

Asian Pay TV (APTT) has released its full year results.

Summary

• Total revenue declined by 5.4% due to sunset TV business
• Dividends of 1.05 cents, guiding for 2025 to be 1.05 cents
• Broadband Business Growth of 5%

Business Prospects

Revenue will keep falling at around 5% per year, this is due to the shift away from TV. CEO has commented the task now is to upsell customers to higher tier broadband plans to ensure revenue does not decline as much.

Sustainable Dividend

APTT generated 149 million in cash last year, I expect further decline to 145 million in cash this year.

Interest Cost is expected to grow as well to 42 million with the expiration of hedges. With Capex needs of 35 million and taxes of 13 million, APTT has 55 million in spare cash. Its current dividend payout of 1.05 cents equates to 19 million in cash. 

Hence, there is headroom to maintain its 1.05 SG cents dividend as it continues to use the excess cash to pay down the expensive Singapore offshore debt. I expect APTT to eventually become a $120 million annual cashflow generating trust still giving it the ability to maintain 1.05 cents dividend.

Good Dividend Stock to Own

APTT will continue to see revenue loss due to its large TV segment being in a sunset industry. However, dividend wise, APTT can maintain a 1.05 cents dividend.

So it is a good dividend stock to own as long as 10% dividend yield is maintained. At current price of 8.3 Sg cents, it is a good buy.

Yangzijiang Financial: More Stock Price Gain to Come

 Yangzijiang Financial Holdings (YZJFH) has delivered full year results which is within expectations.

Summary

• Earnings per share of 8.6 cents
• Dividends of 3.45 cents
• Earnings was boosted by china government grant (1 SG cents) and no more credit allowance provisions in losses

Currently YZJFH trades at a share price of 56.5 cents or SGD$1.98 billion market cap.

Earnings

As said, YZJFH recorded SG$40mil in government grant, SG$30 mil in exchange rate gains. I am sure this will not be replicated in FY 2025. However, as the company's debt investment portfolio continues to decrease, we might see more reversal in credit allowance which is a "gain". This will offset government grant income.

I expect YZJFH to log a 8 SG cents in annual earnings for FY2025. 02 reasons: first, its maritime investment business in Singapore is growing and second, the company will start reversing its credit allowance because its china debt investment is growing smaller.

$1,380 Million in Cash and Cash products in Singapore

One important point from the year end results is that YZJFH has transferred a significant amount of cash from China to Singapore. With the cash in Singapore, it can be easily verified and reduces the allegations that the cash items in its balance sheet is fake. 

The total amount of funds in Singapore cash and yield enhancement produces is now SGD$1.380 billion. The company has 52 cents in cash equivalent products. This means 90% of its current market cap is in easily realised assets. 

Cheap at Current Price 

Even at 56.5 SG cents, the stock is way too cheap. At future 8 SG cents earnings and 3.2 SG cents dividend, this stock is at least a 5% dividend yielder. Hence target price is at least 64 SG cents.

However, I do not think this is a fair value as it slowly winds down its China debt investment, with continuing share buybacks, YZJFH should march towards a $1.20 NAV. Putting it at 0.8 times price book, it is 96 SG cents. There is a lot more upside to go.

<Author is vested in YZJFH>

Portfolio Update Feburary 2025 - U-Turn on Keppel REIT Due to Decline, Partial Sale of Alibaba

Due to the run up in share price, I have taken profits off Alibaba.

About 12% of my stake in Alibaba was sold. I will hold the rest of the stake until it reaches HKD$210 (my estimated forward PE of 25). Should Alibaba return to the HKD $100-$125 region, I will start to buy back what i sold off.

Portfolio

Using the sales proceed from Alibaba, I have bought (i) Keppel REIT and (ii) PRIME US REIT.

Previously, I wrote why I would not buy Keppel REIT. However since then, it has fallen 7% post ex-dividend and become a fair value/hold at 81 SG cents. As I have said, the true dividend of Keppel REIT is 5 SG cents and with rental reversion and interest rate being lower, it can go up to maybe 5.3 SG cents. This translates to a 6.5% yield. Many of Keppel REIT properties are in prime areas and buildings are of the Trophy-Grade A status. So i do believe in the flight to quality story and the resiliency of its tenants.

On the assumption the REIT is a 5 SG cents yielder and if it becomes a 5% prospective yielder at $1, I will sell. 

PRIME US REIT is another addition and I do not need to repeat why I think it is a buy.

Dividend

Unitedhampshire REIT and Asian Pay TV Trust has announced dividend within expectations and are of good yield. However, as they will pay it in March 2025, I will not count in this post.

So dividend collected this year has remained at $0.

The portfolio now has a value of about $827,000.

UnitedHampshire Retail REIT Year End: 8+% Dividend with Potential Capital Gains. A Top Pick

 Unitedhampshier ("UHREIT") has announced its year end results. In summary:

• Leverage is down to 38.9%
• Annual Dividend is 4.06 US Cents
• Rental Escalation
• Interest Coverage Ratio of 2.5 times

Outlook

Impressive results throughout with revenue growing due to rental escalation. Its cost of interest seems to have peaked with interest now falling for 4Q.

Overall, I expect UHREIT to increase dividend due to higher rentals + possibility of the REIT manager electing to be paid in Units should share price hit 60 US cents.

Capital Gain

Often people says investing in REIT is for the dividends and not capital gains, however UHREIT may buck the trend- it offers both. With greater appreciation by investors of the resilience of its sub sector (groceries), investors will  be aware of the resilience in its dividends and find the REIT a steal at 48 US Cents (8.4% yield). I do think a re-rating will occur where it becomes a 7% yielder. 

In addition, I forsee with interest rate falling and revenue growing, the DPU of UHREIT will be 4.1 US cents for 2025 despite the divestment of 1 property. At forward 7% yield, I am guiding for UHREIT to be 64 US cents in 2025. 

UHREIT is exceptional and will best any Singapore property. It is going be a dividend yielder + capital gain giant for 2025. It should be worth its NAV of 75 US cents because of the annual profits it is clocking. With the fall in interest rates, its dividend will start to rise from its annual 4.06 US cents dividend.

Spending for Jan 2025: Hit $800

Previously, I had covered how I plan to budget my approximate $755 spending in credit cards for daily neccessities around Maybank Family and Friends Card.

Performance for Jan 2025

Total expenditure was $829 with $52 in cashback clocked.

Grocery Spending is High Due to Inflation

Close to my estimates, grocery remained expensive coming in at $410 per month. About $50 came from dining because F&B outlets withing supermarkets have the same MCC code of supermarket for Donki and NTUC fairprice.

Grocery expenditure will continue to form bulk of my expenses as I continue to prepare my meals to eat, drink and continue living in this world (sorry for being morbid, but harsh facts of life)

Spending Behaviour

Despite spending less on outside food, I incurred a medical cost at a government clinic, so it helped to reach the $800 minimum spending. 

Front loading was done due to an Eight Telecom Mobile credits promotion where if we top up $28 in credits we get $38 credited instead. This was bought on shopee. I also bought $20 of NTUC voucher on shopee to clear my shopee coins which offered me a final 25% discount off NTUC vouchers

My grocery spending in February might be slightly lower as I will burn through the the $20 NTUC voucher and not eat at F&B outlet within supermarket. For Feb, it is likely dining & groceries will be in the $300 range. Actual e- commerce expenditure might be zero. So I will be short of about $100 in estimated expenditure. Front loading might be needed. Dosen't help that Feb only has 28 days.

Transport

One thing I learnt is that Simplygo transactions takes a while to be posted to credit cards. For the month of Jan, my EZ link transportation fares from 24 Jan have not been calculated. As such they will only be charged in Feb. So the positive is that likely my Feb transport fare will be a lot higher. This will help me reach the $800 spend easier.