Record High Car COE Prices in Singapore and Association With S$100 Chicken Rice.

I was watching 1M65 channel by the influential Mr Loo yesterday. Apparently, Mr Loo is in angst over the record high Certificate of Entitlement (“COE”) price as his current car COE is expiring by mid January 2026. Consequently, he lamented that he has no choice but to spend a large sum of money to buy a car which is essential for him as he needs to travel to Malaysia frequently as well as for local business meetings or business appointments. Interestingly, he gave an example of a S$100 chicken rice to elaborate how S$100 is deemed affordable to many local residents but that many will think that it is not value for money as an analogy to his unhappiness over the raging COE prices across the motor vehicle categories.

The Tesla Model Y Now Comes With Cat A Version To Keep It Affordable

1. Car is a always a Luxury Good in Singapore Context

I think that car is always a luxury good….period. From economics perspective, owning a car is one of the most wasteful consumption act in society. If we are using cars like taxis or private hired vehicle which are on the road most of the time during the day, then it will be a just consumption. However, for privately owned cars, the real issue is that most people just drive it to and fro work and that most of the day, the car remains idle thus producing no real benefits.

Furthermore, in Singapore context, the public transport network such as MRT trains, buses as well as public hired vehicles like Grabs and also hailed down taxis are very well developed and convenient.

Given Singapore’s limited land size and growing population, there is unfortunately a limit to the growth in car supply. COE at S$100K will be a norm going forward under the constraint in supply situation.

2. The Chicken Rice Analogy is Flawed

Chicken rice is actually nearer to the spectrum of essential goods rather than luxury goods from economics theory perspective. So there is actually no meaning to compare the current high COE prices to the imaginary scenario of S$100 chicken rice and paining that as an analogy to the high car prices in Singapore.

Moreover, S$100 plate of chicken rice is never affordable in the first place for basic essential meals so not sure why Mr Loo thinks that it is affordable. 

The BYD Sealion 7 Now Also Comes With Cat Version To Beat High COE Price.

Parting Thoughts

If one wants to own a car in Singapore, then one has to accept the fact that one has to pay a heavy price to government coffers for the right to own a car in Singapore for 10 years. Be prepared to fork out S$200K for a new car in Singapore going forward. S$200K is a huge sacrifice towards financial freedom as the opportunity cost at 6% per annum amounted to the loss of <S$12K> of recurring income on a yearly basis.  

Centurion Accommodation REIT IPO- 3 Reasons To Stay Away (Part 2).

Honestly speaking, I think that it is too pre-mature for Centurion to launch their Centurion Accommodation REIT ("CAREIT"). A REIT is supposed to hold investment properties that are stable and has a good historical track record of generating an amount of rental income, so I was very surprised that some of its assets that just came online from development or redevelopment are being pushed directly into CAREIT for a lightning pace listing. For example, there is a student accommodation that is still being developed in UK but will be injected into CAREIT within 6 months after its anticipated IPO date (estimated to be Oct 1, 2025). The management should have waited at least 1 year till end 2026 to allow such newly developed property to be pumped into CAREIT so that it can prove its worth. Then there is also the enigmatic variable called the "Mandai Expanded Capacity" (please see my previous post) that makes the entire prospectus hard to understand due to it being loosely crafted. Seriously, it makes me wonder whether the Centurion management team is facing a dire cash crunch crisis as they seemed desperately in need of cash for working capital and trying so hard to get CAREIT listed on SGX as soon as possible.

1. Investment Property With No Proven Track Record Being Pushed into CAREIT + Weaker Rental Rates across some properties. 

(i) Unstable and concerning lower rental rates for student accommodation?

For dwell Princess Street, dwell Cathedral Campus, dwell Archer House and dwell Hotwells House, there is a reduction in NPI for projected FY2026 and FY2027 relative to FY2024 due to reductions in rental rates. Does this mean that there is a correction in student accommodation rental market or are there issues with the properties? Will this lead to a fall in its other UK properties going forward?

(ii)  Epiisod Macquire Park property in UK still being built but to be pushed into CAREIT upon TOP.

Epiisod Macquarie Park is one of the newer premium student accommodation (PBSA) assets under development by Centurion, and slated to be included in the CAREIT after completion. The problem here is that Centurion should have held on to this property while awaiting it to be more stabilised before injecting it into CAREIT. Instead, it is pushing CAREIT unit-holders to take on the risk of a new property that may not perform as well as expected. 

(iii) 4th block of worker dormitory with 3,696 beds still being developed at Mandai

While this can be termed as an asset enhancement, the fact remains that this is a significant new development in its Mandai property portfolio, and it will need to be filled to match financial projection.

2. Weakness in Financial Strength of CAREIT's Sponsor Centurion.

Unfortunately, despite the fantastic performance in its share price, Centurion Corporation Holdings is still relatively tiny in scale relative to the Big REIT Sponsors in Singapore. Centurion is much smaller compared to heavyweights like Mapletree, CapitaLand, Keppel or Frasers.

Market cap (as of mid-2025) is approximately S$1.1–1.2 billion, versus tens of billions for the mega sponsors.

So in relative terms, Centurion is a mid-cap niche operator and not a “mega-sponsor”. During times of financial crisis of CAREIT, there will always be lingering doubts on the mind of investors on whether Centurion will be able to save its own REIT. There is no free lunch, hence the high distribution yield on offer of around 7.66% to 8.57% in projected FY2026 and FY2027 respectively (based on S$0.88 per share) to entice investors for subscription into CAREIT which reflects the substantial market risk premium. 

3. Workers accommodation is significantly more than student accommodation

This is a huge bugbear for me. Personally, my own view is that student accommodation supporting the education industry is probably the most resilient business out there while worker accommodation industry I thought is rather cyclical in nature that follows the boom and bust of the construction industry. If construction demand slowed down, there is no point in business owner keeping too many workers in the dormitory. I am utterly disappointed that the student accommodation component (even if the sponsor throws in Epiisod Macquire Park) is such a tiny proportion of the entire CAREIT. It is not even 50% of the entire portfolio. My preference would be to wait for a REIT that has 100% holdings in student accommodation.

Only a small fraction is Student Accommodation

Accommodation Industry Is NOT weatherproof

One final thoughts on this point is that since we have just been through COVID, the hard truth is that not even student accommodation industry resilience can save it during times of pandemic but nonetheless, the probability of another pandemic occurring in our lifetime is on the low side based on history.

Parting Thoughts

I am actually lukewarm with regard to my overall feel for this IPO and not particularly excited. With the projected cuts in interest rate and recovery of the REIT market, I think that CAREIT should do fairly well in its IPO given its low leverage ratio of 30% even after targeted acquisition of the newly developed Epiisod student accommodation into its enlarged portfolio- It does gives it additional room for further yield accretive acquisition. Nevertheless, I am still troubled by the weaker financial strength and capabilities of the sponsor during crisis relative to the Singapore government linked sponsors.  

Put it this way, if Mapletree Investments were to list their student accommodation business for IPO, I will definitely be subscribing for it. Summarising, I am going to give this IPO a miss while waiting for a more suitable investment opportunity. 

[P.S: For those interested in CAREIT IPO, note that it opened at 10pm on September 18, 2025 (Thursday) and will close by 12pm on September 23, 2025 (Tuesday). It will commence trading at 2pm on September 25 , 2025 (Thursday).]

Centurion Accommodation REIT IPO-Preliminary Thoughts and Highlights (Part 1).

Centurion Corporation Holdings will be launching the IPO of its workers' dormitories and UK student accommodations soon. It will be known as the Centurion Accommodation REIT ("CAREIT"). CAREIT will be paying out a very attractive 7.66% distribution yield for FY2026 and 8.57% for FY2027 based on S$0.88 per unit. The targeted listing date that its management are eyeing on seems to be early October 2025. I will do up another post after looking through its prospectus filed with the MAS- it is a jaw- dropping 1240 pages thick- before sharing my final thoughts in subsequent part 2 post of whether to get into this IPO. Preliminary highlights as follow:   

1. The enigmatic "Mandai Expanded Capacity" Terminology-Poorly Crafted and Misleading Propsectus.

In the prospectus, one will keep seeing this strange term appearing (first appeared on page 100) and talking about the impact of "expanded" capacity but then the definition appears quite the opposite as it is loosely worded as a contradictory reduction of bed capacity. So what the heck is this term talking about? 

Definition of  "Mandai Expanded Capacity"

It was further mentioned in the prospectus that the Mandai Expanded Capacity Consideration” means the consideration of S$34.0 million payable in relation to the Mandai Expanded Capacity. Such consideration is payable when the Mandai Expanded Capacity (i.e. the additional 1,980 beds) is operational for immediate occupation (Please see Page 288 of the Prospectus for details)

Unless otherwise stated, all information in this Prospectus relating to the Properties, such as Agreed Property Value, Appraised Value, aggregate purchase consideration, number of beds and portfolio information, excludes the Mandai Expanded Capacity and the Mandai Expanded Capacity Consideration.

2.  So what the heck is "Mandai Expanded Capacity" then?

<Quote>

"Mandai Expanded Capacity" refers to the 1,980 beds in Westlite Mandai which were supposed to be removed upon completion of an additional block. 

</Quote>

Now, this becomes a real test of one's English language. My initial understanding is that the essence and emphasis is on the 1,980 beds that will be eventually removed.

3. Nope, my initial understanding is totally wrong!

After looking through the financial projection on page 200 and also number of beds including and excluding comparative in Mandai property on page 291, the essence as aforesaid mentioned in point 2 above totally does not align with the financial information.

 

Personally, I thought that the investment banker or staff crafting the definition of the Mandai Expanded Capacity ought to be shot. They are actually referring to 2 points here:

(i) it includes in the 1,980 beds in Westlit Mandai that was supposed to be removed but still taken in as revenue generating since the new government regulation only come into effect after 31 December 2030.

(ii) on top of (i) above, the term also includes in an additional 3,696 beds from the 4th block that is still in development and expected temporary occupation ("TOP") in January 2026.

The original definition is totally misleading and contradictory to different parts of the prospectus and not transparent at all.  

So the point is that the financial projection on page 200 on Distributable Income actually includes in the assumption of the successful leasing out of beds in phases in the newly built 4th block of Westlit Mandai. The risk here of course then is whether the projection is overly optimistic.   

3. Management Fees.
The base management fees and incentive structure is quite similar to the Mapletree Pan Asia Commercial Trust. Other REITs are on the AUM model. So think still in line and a fair model.

4. The Enlarged Portfolio.
This is the other strange part that keep popping out on "enlarged" and normal portfolio that forms the REIT. Basically, this is referring to the Epissod Macquire Park Student Accommodation that is currently still being built. But it will be added into CAREIT after it is listed as it is about 6 months away from completion.

Parting Thoughts.

Personally, I am actually annoyed at the poorly and loosely crafted "Mandai Expanded Capacity" that leads to a lot of mental acrobatics which gives a rather poor impression of the entire IPO. I will do a part 2 post of my personal thoughts on whether I am jumping into this upcoming IPO after diving through the prospectus. 

[P.S: Please refer to Part 2 continuation of my post on whether I am subscribing for CAREIT here]

New Dividend Fund Allspring Global Equity Enhanced Income Fund- Targeted 6% Dividend Yield Per Annum.

Just came across the Allspring Global Equity Enhanced Income Fund from Endowus recommendation on dividend funds besides Fidelity Global Dividend Fund and Fidelity Asia Pacific Dividend Fund. Interesting thing about this Allspring unit trust is that it invested in global dividend stocks as well as employ an option strategy to earn option premium. Of course, if market performs well, this Allspring fund may lack behind due to the use of option. 

1. Performance of Allspring Global Equity Enhanced Income Fund

It has outperformed the high dividend benchmark and peers since its inception in 2020 while providing clients with a consistent quarterly dividend income stream. It offers a target pay-out of 6% with 4% from a high yielding equity component and 2% from an options overlay strategy. Options overlay is dynamically managed to ensure that the upside of the equity sleeve is not adversely compromised. 

Its NAV also has a good overall uptrend unlike some funds which pays high dividends of more than 8% per annum but is actually paying this out of their capital with NAV going downwards.

Overall, Allspring Global Equity Enhanced Income Fund has annualised returns of 16.42% over the past 3 years which is extremely impressive.

2. Low overall annual management fees of only 0.8% per annum at fund level

This is way lower than many of the equity funds (over 1%) out there with only 0.8% per annum.

3. Be careful of its US sector exposure

I think that the US stock market is overly valued. This fund does have close to 20% exposure to US with tech stocks such as Nvidia in its stock holding portfolio. For those who thinks that the AI bubble will burst, then there maybe potential downside from holding on to this particular fund. It is also not very clear and transparent on 76% of its geographical allocation as it show up as "Unclassified". So the big question mark is what is "Unclassified"?

4. Size of Fund is only S$117.5Mil as at 29 August 2025.

The fund size is actually very tiny relative to the Fidelity Global Dividend Fun of S$22.9 billion as well as to the Fidelity Asia Pacific Dividend Fund of S$500Mil. There is the probability that this Unit Trust may be closed down by its fund manager and one maybe exiting their investment at the worst possible time due to market downturn.

Parting Thoughts

I maybe allocating part of my future portfolio into this fund for diversification. Do note that there is another similar USD funds by Allspring with the same name. However, one should go for the SGD hedged fund to minimise one's forex risk. Another point to note is that this fund pays out distributions on a quarterly basis and not monthly.

Venture Into UnitedHealth Group- Will It Recover To Its Heyday of More Than US$630 Per Share?

UnitedHealth Group is a multinational health and well-being company that operates primarily in the United States and internationally through its health benefits business. As can be seen in the share price of UnitedHealth Group's ("UNH") trending over the past few years, 2025 saw a disastrous collapse of it's share price to a record 5 year low of U$234.60 at 1 given time. While it has since recovered to the level of approximately US$310 per share, it is unfortunately just a faint shadow of its former glorious day. I have decided to take up a a very tiny position in UNH as I think that in the long run, its experienced management team should be able to resolve all current challenges and its earnings should at least go back up by 50% even if not 100%. 

Recent decline in UNH’s share price stems from a combination of operational pressures, regulatory concerns, and leadership instability:

(1) Skyrocketing medical costs

The company’s medical cost (loss) ratio surged to 89.4%, up from around 82% in 2022, severely eroding margins. Operating margin dropped from 8.8% to approximately 7.3% over the last year.

(2) Collapsed earnings guidance & missed expectations

UNH slashed its full-year adjusted EPS forecast from about $30 to just $16—a ~47% downward revision—falling well below analyst expectations. In Q2 2025, it reported EPS of $4.08 vs. ~$4.48 expected, disappointing investors despite revenue being roughly in line.

(3) $6.5 billion of unexpected medical costs

This oversized burden, mainly impacting Medicare Advantage and Medicaid segments, triggered sharp margin contraction.

(4) DOJ investigations and regulatory scrutiny

UnitedHealth confirmed both criminal and civil investigations by the U.S. Department of Justice concerning its Medicare billing and practices—heightening uncertainty.

(5) Leadership upheaval and reputation risks

The abrupt resignation of CEO Andrew Witty and the fallout from the high-profile murder of an executive, Brian Thompson, who was shot and killed while walking to an investor conference further rattled investor confidence.

Parting Thoughts

It had been reported that Warren Buffett’s Berkshire Hathaway purchased approximately 5 million shares of UNH during Q2 2025, investing around U$1.57 billion, which means an average entry price of about $314 per share. Based on its share price of US$307 per share as at 3 September 2025, this means that one is buying in at a lower price than Berkshire. I have initiated a tiny position of 2 shares into UNH. Will accumulate further if the price of UNH went back into a slump below US$300 per share.

Will Alibaba (9988) Rise 10% This Week In Line With US ADR Performance?

Interestingly, Alibaba missed analyst revenue target but its US ADR shot up more than 10% last Friday. Apparently, market is excited over the news that Alibaba is producing its own AI chip. I am not sure whether market were speculating that Alibaba may be going down chips production like Nvidia or excited over the impressive more than 20% Alibaba cloud growth. On hindsight, should have added in S$10K of Alibaba stocks last Friday but then who can predict the market right?