Investment Portfolios Updates (31 Oct 2025) - Net Investment of S$910K and Projected Annualised Passive Income of S$48K.

A rising tide lifts all boats indeed. My net investment portfolio jumped by almost +S$100K within 2 months (from S$813K to S$910K) mainly due to the rise of Alibaba AI and Cloud play as well as the revival in Singapore REITs. Gross investment is now at another record high of S$1.179Mil.

1. Portfolio 1- Stocks Held in SGX Central Depository 

Not much changes here except for the higher market valuation. Unfortunately, there is very little changes in the amount of projected dividends.

2. Portfolio 2- Margin Purchased Securities
(Note: My margin purchased securities has grown to a sufficient scale to sustain itself and can pay off annual financing charges as well as to gradually pay down the margin loan through the dividends generated.) 

Keppel Ltd has been delivering a super impressive profit growth of 25% (if we normalise and exclude the one-off recorded loss for sales of M1) for the 9mth ending 2025. In addition, have subscribed for 5000 excess units of Keppel Date Centre REIT ("KDC") and managed to get all- please see here for the past blog post I made.

3. Portfolio 3 (with Tiger Brokers and MooMoo) 

(Venture into higher risk as well as capital growth stocks here)

Have foraged into an additional new stock BYD here that is manufacturer of EV cars and batteries. BYD is one of the few contenders out there (besides Toyota and CATL) that is on the verge of successful mass production of the next generation of EV solid state battery. Solid state batteries is the next stage evolution for EV or arguably the “holy grail” of EV which will enhance mileage by at least 50% and significantly improved recharging time-please refer to my previous post in 2018 regarding the first working prototype of solid state battery. Unfortunately, the mass production has been filled with enormous technical challenges hence mass market adoption projection is expected to be around 2027 or even 2030. 

4. Portfolio 4 (Endowus Unit Trusts & Other Investments)

I have added investment into 2 new unit trusts via Endowus, that is the (i) Allspring Global Equity Enhanced Income Fund and the (ii) Franklin Gold and Precious Metals Fund. 

Parting Thoughts

Currently, my growth strategy investment is on Alibaba and BYD in China market. I continue to stay away from the US market (except for a small stake in United Healthcare Group). Overall, I am still committed to my dividend passive income strategy and continue to build it up gradually by increasing stakes in Unit Trusts to ensure sufficient diversification. 

Ok. that's all for today Folks. Have a great week ahead!

Keppel DC REIT Rights Results And Thoughts On Future Prospects Of This "Growth" REIT.

This is to give an update to my last post "Taking a Punt in Keppel DC REIT Rights Issue To Make Small Immediate Profit". Interestingly, market price of Keppel DC REIT ("KDC") did not drop below S$2.40 per unit after the rights issuance and in fact went up to S$2.43 per unit as at Oct 28, 2025. Anyway, I managed to get all my excess rights issue of 5,000 units of KDC units. So in a way, I have realised immediate profit of +S$750 from selling off 5,000 units my KDC holdings on Oct 6, 2025 and also managed to get back all the 5,000 units that I had earlier sold off via the excess rights subscription.

Future Prospects of KDC

The current distribution yield for KDC is at a miserable 4.2%. The stock market seems to be awarding a market premium per unit over the net assets per unit of KDC. This can be attributed to the M&A path that the management of KDC is embarking on which will mean growth in its DPU. With a market premium over its net asset, it will be easy for KDC to find yield accretive data centres to add on. This is the virtue cycle of a REIT that is highly sought after.

Parting Thoughts

I do not particularly rejoice in owning too many KDC units as I do not like the constant request for capital injection via rights issue. Personally, I thought that buying into its sponsor, Keppel Ltd, maybe a better alternative rather than investing into KDC at the current market price of S$2.43 per unit. 

Taking a Punt in Keppel DC REIT Rights Issue To Make Small Immediate Profit.

For my thoughts on whether I will be subscribing for this latest rights issue and key application milestone from Keppel DC REIT ("KDC"), please refer to my earlier post. Additionally, have decided to take a punt and make use of Keppel DC REIT ("KDC") rights issue exercise to try to earn some spare cash. The current market price is S$2.40 per unit as at Oct 3, 2025 (Friday) which I think is the peak price for this period. and price will start dropping from this point. Generally, by the time the new units get listed on SGX (Oct 22, 2025), the market price will commence tapering off as some investors will not feel happy with subscribed folks who are getting new KDC units at a discounted S$2.24. So the period from Oct 3, 2025 till Oct 22, 2025 will present an opportunity to maximise making the most money for immediate realisation and usage which I will further elaborate below. In fact, the probability of this one off punt making money is higher than striking the SG Toto's Group 7 prize (striking 3 numbers and winning S$10). 

1. Key Factors to Consider

(a) No major changes in macro-economic outlook or market events causing sudden surge in market prices within this short period;

(b) Able to have the "lobang"(via your stock broker) to get one's hand on the exact same number of excess rights issue as the number of units that one will be selling off immediately so as to maintain the same number of holdings in KDC;

(c) No of units for immediate sell-off should be of sufficient size to make the transactional trading cost (referring to selling cost here as the rights allotment admin fees is just S$2 irrespective of size of the subscription/purchase) worth it.

(d) As alluded to 1(b), if unfortunately unable to get the full 5,000 units of excess rights, then I will re-invest the proceeds into other higher yield SREITs. I believe that KDC current 4% per unit will be easy to beat. 

2. Execution of Plan and Mechanics

On the morning of Oct 6, 2025 (Monday), I have sold off 5,000 units of KDC at S$2.39 per unit for a total of S$11,950 (sold off immediately at S$2.39 bid price as I decided against queueing to sell at S$2.40 per unit).

Subsequently, I have made an excess rights application of 5,000 units of KDC at S$2.24 (totalling S$11,200) on top of my allocated allotment with my stock broker.

3. Mechanics & Targeted Profits

I am targeting for a quick profit realisation of S$750 (S$11,950 less off S$11,200) with the above maneuver by locking in the selling price of S$2.40 per unit as of Oct 6, 2025 morning. 

Parting Thoughts

Overall, I have no interest in increasing my stakes in KDC by too much as it is only yielding 4% and the market price per unit is at a huge premium over its NTA per unit. Market seems to be pricing KDC as a growth stock. Hence I am taking a bet that S$2.40 per unit is the peak market price reached for this rights issuance and to sell off immediately to optimise the profit realisation.

Keppel DC REIT Growing Fast- New Acquisition of Tokyo Data Centre and Preferential Offering.

Wow....great news for folks holding on to Keppel DC REIT ("KDCREIT"). KDCREIT just announced on September 23, 2025 that it will be acquiring a 98.47% stake in a freehold new data centre in Tokyo. This is a newly completed 5 storey data centre in 2025 that comes with a Fortune Global 500 client that has signed on for 15 years and granted an option to renew the lease for another 5 years at the end of the current lease term. 

1. Acquisition Overview

This acquisition is expected to be immediate yield accretive by 2.8% while maintaining a healthy debt leverage of 34.5% post acquisition. With the entry of this hyperscaler tenant, this property is expected to strengthen overall portfolio resilience and also provide even more diversification. This is a wonderful growth opportunity.

2. Method of Financing

The total acquisition cost of the new Tokyo data centre is expected to be S$708.3Mil. It will be funded via a mix of new JPY denominated debts and equity fund raising.

3. Key Details of the Preferential Offerings

The issuance price will be S$2.24 per unit on a 80 for 1000 units allotment ratio. As as September 23, 2025, the last market traded price of KDCREIT is S$2.36 per unit. The offer price is thus at a 5.1% discount to the market price.

4. Timetable of Preferential Offering

For those interested in the rights issue by KDCREIT, please take note of the above timeline so as not to miss the subscription. The last date and time for acceptance of the new units is on October 13, 2025 at 5.30pm (Monday).

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5. Parting Thoughts- Will I subscribe to this Preferential Offering?

Well, this is after all a yield accretive deal so yes, I will be subscribing as long as the market price does not drop below S$2.24 per unit. As of September 23, 2025 morning, KDCREIT market price has increased to S$2.37 per unit after investors begin digesting news of the announcement. 

Keppel Data Centre REIT Remarkable Boost in H1 2025 Earnings and Distributions- Things to Watch Out For Before Jumping In.

Keppel Data Centre REIT ("KDC") just released a remarkable 1H FY2025 results with distribution income surging 57.2% year on year and delivering a super impressive 12.8% growth in distribution per unit ("DPU") of 5.133 cents. Annualised this and the current yield will be 4.43% per annum based on the S$2.32 per unit as at 25 July 2025. Market price of KDC has rallied 5.9% within 2 short weeks as many investors were awed by the spectualar results from KDC. Still, there may be a few potential downsides that retail investors need to be mindful on, especially for those who suddenly find KDC full of prospects, and want to ride the data centre AI wave.

1. Investing in KDC Is Not As a REIT But a Growth Stock.

Then again, if we look back at the announced acquistion of the Singapore data centres by KDC in November 2024, it is already clear that DPU will increase by around 8%. Also, the newly acquired Singapore data centres have very short tenure of 25 years and I thought that even with a 4.31% distribution yield, the current market price of KDC seems very much overvalued if we benchmark to the current risk free government bonds. The distribution yield of 4.31% is thus still extremely low as unit-holders need to prepare to plough back capital into KDC at the end of 25 years for additional extension. The only pausible explantion here is that many investors are treating KDC as a "growth" stock. 

2. Overhanging Issue at Guangdong Data Centres.

There has been no news suggesting that the tenant (Bluesea Data Development) has resumed rental payments or that it has settled its arrears. So question remains whether its Guangdong data centres are now white elephants. 

The only reference I found was the AGM minutes on 15 May 2025 which only mention that 100% quarterly allowances has been made to zerorise income contributions from Guandgong DCs. Also, KDC management are adopting investment assets at fair value for its accounting treatment based on independt valuation reports. So, in event that the situation worsen, investors may have to repay loans relating to those China investments at a loss which will hit future distributions.  

Extract of AGM Minutes on Guangdong troubled DCs.

Parting Thoughts and Personal Thoughts

I am not sure whether one should keep chasing and accumlating KDC at its current sky high market valuation. Its market price is currently S$2.32 per unit as at 25 July 2025 while its NTA is only S$1.53 per unit (as at 31 December 2024) and this means that one is paying a jaw dropping premium of +51.2% over its NTA. Nevertheless, if I want to increase my investments into REITs with data centres exposure, I will probably choose Mapletree Industrial Trust followed by KDC rather than DigiCore REIT or the recently listed NTT Data Centre REIT.

Selling Excess Rights Keppel DC REIT For Mapletree Pan Asia Commercial Trust.

Surprisingly, I managed to get all my rights and excess units subscription for Keppel DC REIT ("KDC") preferential rights offering, that is, 5,000 units @ S$2.03 per unit. As per my previous post, I think that KDC is overvalued, so I decided to keep only 1,000 units of the allocated KDC units while selling 4,000 units from the rights allotment to lock in a tiny profit to the market price of S$2.10 per unit and prepare for redeployment in view of the sharp correction in the prices of many blue-chip REITs.

1. Reassessment of Mapletree Pan Asia Commercial Trust ("MPACT")

On the crown jewel front, Vivocity shopping mall continued to shine brightly in terms of its financial performance for the 1st half of FY2024/25. Its other local jewel of Mapletree Business City seems to have lost some of its luster with commited occupancy dropping from 96.8% on 30 September 2023 to 92.5% as at 30 September 2024- nonetheless, its quarter on quarter occupancy has held on well. 

MPACT's Hong Kong segment also seems to have finally some signs of optimism sprouting. I think that the fear of all Hong Kong folks going over to Shenzhen to shop and dine via the high speed train and thus marking the end of Hong Kong shopping malls, may have been over-exaggerated. Festival Walk is a major shopping mall in Kowloon and not strictly just catering for tourist. It remains a popular hangout place for the Hong Kong local folks as per my chit chatting with Hong Kong colleagues.

1.1 Hong Kong star property- Festival Walk finally seeing lights at the end of the tunnel with rental stabilising.

The negative rental reversion has slowed down for Festival Walk albeit my Hong Kong colleagues still feeling gloomy with their economic outlook. 6 mths ago, the reported rental reversion is a miserable -8.7% while the recent announcement is a tad lower -6.1%.

 There are also ongoing efforts to curate the right retail mix to cater to local's demand for experiential and lifestyle concepts.

1.2 The Accretive Divestment of Non-Core Asset Mapletree Anson on 31 July 2024

The successful divestment of Mapletree Anson at a fair value gain while MPACT is trading at 29% off its NTA thus managed to lower its aggregate leverage to 38.4% (below 40% level) and boost unit-holders return.

1.3 Sharp Drop in market price back to S$1.20 per unit as at 20 December 2024 range from S$1.53 per unit on 3rd October 2024.

MPACT has corrected by approximately 20% in less than 3 months. This is despite the continued interest rate reduction by the US Federal Reserve that was just announced. It is also giving out an attractive distribution yield of 6.5% per annum based on the recent distribution.

Parting thoughts

After selling off my KDC excess stocks, I have snapped up 5,000 units of MPACT last week @ S$1.21 per unit in view of the significant price correction. Come to year end, I intend to invest another S$10K to either MPACT or Link REIT as I think that Hong Kong will eventually rise and shine brightly again given the latest developments- Hong Kong's economy is set on a recovery path with five consecutive quarters of positive GDP growth.

The Upcoming Acquisition of New Data Centres for Keppel DC REIT Are Not As Rosy As What Many Believes-Part 2 of 2.

Hi Folks, in my previous post on why things are not so rosy as it seems with Keppel DC, I have mentioned why I think that KDC is overpriced even with a 4.43% distribution yield even after the major acquisitions of 2 data centres at Genting Lane from its sponsor. Interestingly, I think that investors is viewing KDC as a “mini” growth stock rather than a REIT. The belief in more of such future acquisitions might be the only plausible explanation on the market premium over its net book value and current super low distribution yield.

Anyway, for those retail investors who are interested in the preferential offer, please take note of the below key dates so that you don’t miss it:

Pricing has been set at S$2.03 per unit. Every existing retail investor will be entitled to 86 new units for every 1,000 units held.

Parting Thoughts

Since the market trading price as at 29 November 2024 (Friday) is still at a strong S$2.220 per unit and the preferential offering is at S$2.03 per unit, there is approximately 10% profit for those who managed to find ways to oversubscribe & gets allotted extra units. Selling these extra units off on 18th December 2024 will then become a tidy profit within a short 2 weeks trade, assuming that the market price remains strong at current level. Of course, if price were to tank after the preferential offerings, then one has to eat grass. :)

The Upcoming Acquisition of New Data Centres for Keppel DC REIT Are Not As Rosy As What Many Believes-Part 1 of 2.

The top news for the past week, which many SREITs investors are super excited about, seems to be the acquisition of the Genting Lane Data Centres by Keppel DC REIT (“KDC”) from its Sponsor Keppel Ltd. Many analysts and also postings on social media by bloggers & YouTubers have been singing high praises over the upcoming acquisition and the associated equity fund raising of over S$1 billion in capital. The private tranche has over 3.4 times of oversubscription and I believe that the upcoming preferential offerings for retail unit-holders will be also as hot and crazy. While I think that this deal is sensible, nevertheless, I thought that it is not exactly a fantastic one and there are some key risks here that some investors seemed to have closed one eye given the hype over  Generative AI and the usual strange belief that KDC can grow its distribution per unit indefinitely with many more such "upcoming fantastic acquisitions".

Things are not exactly rosy at KDC

Well, I don’t want to be a wet blanket here. I mean I am also a former firm believer that the data centre leasing business has resilient demand with tenants that will not be migrating upon expiry due to the significant challenges in moving all the data servers and that the current Tech focused world means that this is the latest hot cake that will be growing exponentially to cater to the insatiable market demand-look at the mind whopping double digit  rental reversion that the Data Centres are charging their tenants upon lease renewal-KDC announced during their half year results that they have renewed a major tenant for +40% rental reversion. The prospective new leases at Genting Lane Data Centres are also asserted to be up to 10% to 20% lower than the prevailing market rate which implied more potential upsides upon their current lease tenant contract expiry. 

However, folks seemed to have forgotten about (i) KDC trouble at Guangdong DC and (ii) also that its current distribution to unit-holders are on artificial life support with S$13.2Mil none-recurring distribution from the DXC settlement that the management has cleverly spread over the 1st half and 2nd half of FY2024 respectively to avoid a significant tapering off in distributions to unit-holders. (iii) In addition, the new acquisition is not a free-hold building. The ownership is only for 15 years or 25 years if the extension option is being exercised and paid for. I call these the 3 key risks of holding on to KDC which I should elaborate on further:

(i) KDC trouble at Guangdong DC

I have not heard updates from any reports that the Guangdong DC losses have been plugged. I recalled vividly that Keppel DC is still unable to collect any rental income from this DC. This is extremely bad news. We need to be surgical here. The 1st half DPU from KDC is only 4.549 cents. Normalizing this, the projected DPU for FY2024 hovers around 9.098 cents or S$0.09098 per unit. Taking into account its current  market price of S$2.220 as at 22 November 2024, this implied an absurdly low distribution yield of 4.1%. 

(ii) There is S$13.2Mil of DXC settlement that has been spread over the 2 halfs of FY2024

What this means is that if not for this DXC non-recurring settlement fees, the DPU for KDC will drop even lower than the already rock bottom 4.1%. Even with the recent upcoming acquisition of the Genting Lane DC which proclaims to be DPU accretive of up to +8.1% , the new projected DPU will be at a yield of 4.43%. Bear in mind that we are no longer in a zero or extreme low interest rate environment anymore unlike the last decade. 

Also, this deal is being structured such that only 49% of the control of the new data centres falls under phase 1 in December 2024 while the remaining 51% will only complete in 2nd half of FY2025 (next year) so the effect of the increase of the +8.1% will not be immediate. So, this means that the yield is unfortunately still not very attractive for myself. I am expecting a yield of at least 5.5% to 6% for holding on to KDC. 

(iii) Very short lease tenure of 15 years or 25 years (if extension option taken) for this latest significant acquisition.

Given that this deal is valued at S$1.3 Billion, this will bring the Assets Under Management ("AUM") to S$5.2 Billion. 25% of AUM of KDC will thus be under the very short tenure of 25 years which is the norm for industrial property in Singapore. What this means is that the assets value will plunge to zero and unit-holders will need to be ready for another equity fund raising to extend the tenure from government agency JTC. This brings us back again to my point that 4.43% distribution yield is extremely low as unit-holders need to prepare to plough back capital into KDC at the end of 25 years. Keppel Infrastructure also have this issue with their concessionary assets under management but at least their dividend yield of approximately 7%-8% will cover part of the capital recycling cost to unit-holders. 

Summary of Part 1 of 2

Note that above are just my personal thoughts guiding myself on whether I should be subscribing for this KDC preferential offerings. You folks may have a totally different and optimistic view and that is fine. So don’t roast me for this post.  

In view of the above, I think I will only be subscribing to the bare minimum based on the allotment ratio and some extra to round up the numbers. I think that there is still a possibility that the market price of KDC may decline further. 

Keppel Ltd Heavily Leveraged And Un-investable?

Keppel Ltd’s share price has pulled back from its recent high of S$6.65 in early October 2024 to the recent S$6.40 per share. It’s yearly dividends (excluding special dividends or in specie dividends) is around 33 cents to 34 cents. Hence normalised dividend yield is at around 5.3% based on its current share price of S$6.40 per share. I thought that it is a good time to accumulate more of Keppel Ltd after the recent pull-back.

The Concerns of High Debt to Equity Ratio of 0.9 Times.

Interestingly, there were some skeptics who have condemned Keppel as un-investable and unstable due to its substantial borrowings. The high gearing is due mainly to Keppel’s investment properties and property development segment as well as the infrastructure division. Nevertheless, below are 3 reasons why I would personally still invest into Keppel Ltd. 

1. Shift in Business Model To Focus More on Recurring Income Instead of Capital Intensive Business 

The building up of recurring income is on the right trajectory. As seen below, the recurring operating income now forms a substantial part of Keppel’s income streams-asset management and operating activities (sales of gas, electricity, telecommunication services etc amounted to S$773Mil in 2023. This is a 54% increase relative to 2022 and makes up 88% of net profit for 2023. Keppel’s strategic shift to focus on recurring income and monetisation programme will also release more funds for investments and debt repayment. 

 

2. Keppel Is Retaininig More Than 30%-40% of Its Earnings For Growth

Keppel is only paying out about 60%-70% of its earnings per share as dividends to shareholders and retaining the rest for its existing businesses. For 2023, It has a diluted EPS of 49.1 cents and paying out only 34 cents as dividends. 

3. Prize Jewel in Data Centres Development and Management.

Keppel has recently announced that it intends to expand its current DC capacity from 650MW to 1.2GW in the near term with an additional S$10billion funds under management growth. This will take 3-5 years as these DCs will be built from scratch at selected sites.

The DC at Genting Lane is a good illustrative example. After the development of the DC, they will monetize it by selling to Keppel DC REIT. After selling it off, Keppel will still make recurring income from the management of this investment property as Manager and also rental income from its ownership in Keppel DC REIT.

Parting Thoughts

Last but not least, Temasek Holdings holds more than 20% stake in Keppel Ltd. In the event of a full-blown financial crisis, Keppel Ltd will be able to tap on the financial might of its substantial shareholder as its final life line to avoid a fire-sales at the worst possible time. I have recently sold off S$20K of my Keppel DC REIT after its strong recovery from its record low in the past 2 years which resulted in its distribution yield dropping to only a mere 3.9% with 90%+ payout and reinvested the proceeds into Keppel Ltd.      

My Stock Pick- Should One Still Invest in REITs and Other Dividend Stocks in Current Market Climate?

Hi Folks, it has been a crazy past 2 weeks with the weakening of the US Market and also our local SREITs. Back on 19th September 2024, I have discussed in my previous post that despite the jumbo 0.5% rate cut by Powell, the strong rally in SREITs maybe overdone as the distribution yield of blue chips like Mapletree Industrial Trust ("MIT") dropping to close to only 5% yield at its highest point during the REIT rally. Stronger than expected US payroll statistics also led to various market concern that inflationary pressure will be back and it is still too early to step off the accelerator for rate hikes. Even with the slight correction yesterday, I think that most SREITs are still over-valued as we cannot expect interest rates to be at near zero like the past decade. 

1. SREITs That I Will Still Buy

Seriously, I really cannot find any good buys for the top blue-chip REITs from the trio Mapletree, CapitaLand and Keppel families. Look at MIT or Keppel DC REIT, will you still dare to go in to accumulate additional units at the current pricing?

If I have any additional resources and forced to buy something, I will probably add on to United Hampshire US REIT ("UHREIT") as its price has once again tapered off and giving out a 8.8% distribution yield as at 8th October 2024. However, since this is one of my top holdings, I am already overly-concentrated in UHREIT and will have to give this very attractive SREIT a miss.

2. Overseas REITs That Is Still Worth Buying.

I thought that Link REIT ("LREIT") listed on the Hong Kong Stock Exchange ("HKEX") is a very undervalued counter.  LREIT used to be linked to the Hong Kong Government and has interesting properties mainly based in Hong Kong and China. My Hong Kong work colleagues have been mentioning this to me. Same for Master Leong YouTube channel which he has also shared as a value for money buy. Its leverage ratio is at an enviable 20% resulting from a rights issue at HKD 44 per unit in March 2023. 

I accumulated around 6,200 units of LREIT from May 2024 to July 2024 at an average price of HKD 32.2 per unit since I am getting these units at a big discount to what those rights issue holder paid in 2023. For me, any purchase that is below HKD 44 per unit is not a bad deal. It is currently giving out a distribution yield of 6.96% along with potential for capital growth.

3. Other Interesting Dividend Counters

I thought that Ping An is an interesting recommendation on various media such as Master Leong as aforesaid mentioned. Ping An price has dropped from HKD70+ to a pathetic HKD30 range due to the belief that the China Communist Party will force Ping An to do national service and recuse one of the Property Development firm. I have been adding Ping An (5,000 shares) from Jan 2024 to Sep 2024 at an average price of HKD 34 per share. Its distribution yield was previously hovering near 8% which was too attractive for me. However, with the current market pricing which lowers the yield to only 5.25%, I maybe selling it off to accumulate other investments if suitable opportunities such as if our local SREITs underwent further price correction.

Parting thoughts

I do hope that the China and HK markets continue with their revival as they have been in a bear territory for many years and hopefully produce outstanding capital growth on top of dividends distribution. Strangely, picking undervalued good dividend paying companies in China/HK has turned up to be a good decision with a stroke of good luck in recent week- I certainly did not expect the sudden capital appreciation in just one week. 

Keppel DC REIT Back On Its Growth Path!

Good news from the management team of Keppel DC REIT!  

Please see below for my latest video on YouTube channel. Going forward, I will be posting various exclusive investment contents onto my YouTube channel only. Please subscribe to my YouTube channel also to get the latest content for sharing. 

Can Keppel DC REIT Extricate Itself Out of Its Guangdong Data Centres Misery?

Will Keppel DC REIT be able to extricate itself out of its Master Tenant default saga at Guangdong Data Centres?

Please see below for my latest video on YouTube channel. Going forward, I will be posting various exclusive investment contents onto my YouTube channel only. Please subscribe to my YouTube channel also to get the latest content for sharing. 

Buy More Keppel DC REIT or Sell Off All? Mixed Signals From Analysts And Market Noise After Q1 2024 Results.

Keppel DC REIT ("KDC") is now a faint shadow of its former glory. Its fall from grace begin when tenants default and a high interest rate environment broke the myth of invincibility and resiliency which many investors previously harboured for data centre REITs. Some even compare holding on to data centre REITs as a safe bond-like haven. Today, I will touch on my thoughts on whether one should buy more of KDC or simply just dump all units and move on to other investments with more upside potential. 

Please see below for my latest video on YouTube channel. Going forward, I will be posting various exclusive investment contents onto my YouTube channel only. Please subscribe to my YouTube channel also to get the latest content for sharing.

SREITS Charging Up But Local Banks Going Down- 三十年河东；三十年河西。

The Singapore stock market rally after US Fed remarks signalling rate cuts in 2024. The resultant SGX run up seems to be more SREIT driven. Our local banks have not been performing well recently due to anticipation of lesser profits from weakening net interest margin. I thought that it is interesting that SREITs and our local banking stocks are having quite an inverse relationship in share price performance and makes a good playbook for future inflationary combat references. When SREITS are plunging due to ever increasing interest rates, local banks stock price went to all-time high- now it has turned the other way round. 

1. SREITs Rally and Exceptions Update-Manulife US REIT and Keppel DC REIT

I am not sure whether the current rally is sustainable given that there is still grave market uncertainty. Gold price for example is expected to continue surging in 2024 due to macro-environmental risk factors.  Market is just too volatile these days.

-Manulife US REIT ("MUST") shot up close to 7% today (15 Dec 2023) with the successful conclusion of its EGM whereby unit-holders voted an overwhelming 95%-97% for all the 3 inter-connected resolutions to pave the way for the recapitalisation rescue plan. I have sold off all my 9,900 units speculative trade after making a decent amount to have a meal at Jumbo Seafood. 

Previously (July 2023), I have realised my losses in MUST when it was hovering around US$0.105 level and re-deployed the funds mostly into Keppel Pacific Oak REIT. Too much risk involved in holding MUST made me decide to throw in the towel then.  

 

-Keppel DC REIT ("KDC") buck the trend on 15 Dec 2023 by dropping -9% in a single day due to the sudden announcement that its China Guangdong tenant (Guangdong Bluesea Data Development) has defaulted on its rental payment at the end of November 2023. This represents close to a 10% drop in distribution if the China tenant decided to just declare bankruptcy.

2. Bargain Deals Still Around Despite Recent Rally in Stock Market

I have took up close to S$20K of position in Thai Beverage ("ThaiBev") when its price keep dropping till S$0.50 per share level (and even below for a while recently) after its "disappointing" results announcement. Personally, I thought that it is a fairly decent set of numbers. FY2024 and FY2025 should turn out better for ThaiBev given the dominance of its market share in Thailand as well as in Vietnam and the increase in tourists visit from the economic recovery. Its dividend distribution remain unchanged and is giving a 4.5% dividend yield right now at a close to 52 weeks low pricing. I will probably share more details in another post if I have time. 

I think many analysts are overall still optimistic over the future of ThaiBev. Besides ThaiBev, there are also a couple of other interesting undervalued businesses (Non-REITs) that I am closely monitoring and will be deploying another S$10K of funds to buy into their stocks by year end. I will share more details after Christmas period.

Parting Thoughts

For those like myself who are more into dividend focused investing approach, the rally in SREITS does not have much impact. I intend to hold most of my current SREIT portfolio and will not be selling them. Instead I will be investing future dividends and excess funds into Non-REIT equities as well as bond funds via Endowus to diversify my over-concentration in SREITs,

Keppel DC REIT Recovery of 7% Within A Week.

This will be a short post. The SGX and SREITS rallied over the last 2 days’ trading session. So I decided to sell off a just acquired small tranche of 1,500 units of Keppel DC REIT (“KDC”) to take a quick realized tiny profit at 7.1%. I am a pessimist. I do not think that SREITs is out of the woods yet with Powell’s announcement that the Fed will not do another hike in November 2023.  Neither am I convinced that there will be any material rate cuts in 2024 and 2025. It will take a while to keep the active money supply (from excessive printing over the past decade) from running amok. 

So for SREITs, the pertinent question is whether the effect of positive rental reversion or increased occupancy will outweigh  the grave negative downsides from ever higher interest rates for bank loans refinancing exercise over the next 2 years. I have redeployed the proceeds from KDC as well as excess funds into US renewable energy stock and also bond funds from Endowus to lessen the high concentration in SREITs. 

Further Market Correction Expected This Week Due To Chaos From Escalation of Israel and Hamas War.

Israel has commenced expanded ground operations against Hamas with battle tanks and ground troops storming into Gaza. I foresee further blood bath in the stock markets this week as we have seen in preliminary market reaction during the on-start of previous wars. This week may pose another buying opportunity into SREITs which has been hammered down close to the COVID-19 low.

Quick Highlights:

1. Inflation may come back in the form of higher oil prices which trickled down into higher energy prices for all businesses

There is a current group think that interest rate is at its peak already and that the US Federal Reserve will not increase rates anymore. Current rates of  between 5.25%-5.50% is actually small relative to the interest rates once imposed in 1980s to combat the Great Inflation dark period- the effective Fed funds rate once reached 19.39% in April 1980. 

Moral of the story is not to be too over-confident that inflation is already brought under control. More rate hikes may come until the global economies tanked into recession for the hot demand to finally cool off and to disrupt the inflationary beast

2. "Stable" SREITs mostly in trouble too

The traditional "stable" government linked REITs such as The Mapletree family of REITs are currently running a very high gearing ratio that are already at or near the 40% mark. For example, Mapletree Logistics Trust, Mapletree Pan Asia Commercial Trust and Maple Tree Industrial Trust have gearing ratio of 39.5%, 40.7% and 38.2% respectively. Valuation may go further downwards given the higher interest rates impact and rights issue maybe on the way to avoid breach of banking covenants if the current economic climate worsen. 

Parting thoughts

Personally, I think that no time is a good time to invest these days. Hence despite the gloomy economic outlook, I will most likely be mopping up additional units in Capitaland Ascendas REIT, Keppel DC REIT or United Hampshire US REIT over this 2 weeks. Frasers Logistics and Commercial Trust also looks interesting since it has very low leverage ratio (less than 30%) but I have already added 23,000 units last week and will wait for its September year end results release on 2 November 2023 before deciding on further action.

Will SREITs Crash Further This Week? Cut Exposure to SREITs Or Buy More At Current Lower Price?

The million dollar question this week is whether our Singapore REITs market will crash further after the 4.8% disastrous plunge last week. Well, so far so good as Monday today (23 October 2023), there is a slight rally. SREITs like Keppel Data Centre REIT (“KDC”) which has dropped -14.4% in a single week, from S$2.010 per unit to S$1.72 per unit, has since rebounded by +3.49%.  However, I don't think we are out of the woods yet with the gloomy macroeconomic situation.

1. Risk of Israel & Hamas War Spreading.
Besides Gaza, Israel has been conducting airstrikes against Syria and Lebanon. Iran has also been aggressive towards Israel. US, China and Russia have also been joining in the fray. There are heighten risk of disruption to global supply chain and oil prices may spiral upwards and worsen energy price. Sticky inflation might also rear its ugly head once again. 

2. Interest Rates Risk- Rates Maybe Raised Higher.

The Feds have mentioned that the inflation target is still way above their 2% target and that they may be raising the interest rates again in the future. For SREITs, the fear of higher borrowing costs leading to smaller distribution is certainly driving the market valuation down for most REITs.

3. Divesting DigiCore US REIT And Buying Keppel Corp Instead.

On 18 October 2023, I have disposed 13,000 units of DigiCore US REIT @ US$0.555 per unit and used the proceeds to buy into Keppel Corp when it dropped to S$6.36 per share in order to reduce my exposure to US REITs as well as to take advantage of the special dividend from the latter. This turned out to be a lucky move as DigiCore US REIT has since dropped to US$0.480 per unit as at 23 October 2023. 

Parting Thoughts

Strangely, the earlier morning rebound in price for SREITs on 23 October 2023 morning trading session fizzled out by afternoon. Overall, prices of SREITs continued to drop with only a handful exceptions such as Keppel DC REIT, Capitaland Ascendas REIT & Frasers L&C Trust. I am tempted to inject additional funds into SREITs purchases to take advantage of the significant lower market pricing but have decided to wait till Israel commences their ground offensive into the Gaza which may mark further carnages in SREIT pricing.

Is Keppel Data Centre REIT Annualised 5.1% Distribution Yield From Q3 2023 Results No Longer Attractive?

Is Keppel Data Centre REIT 5.1% distribution yield from its recently released Q3 2023 results no longer attractive and will its business continue to go downhill? Find out more in this video.

https://youtu.be/Uor_RRw8gBs

United Hampshire US REIT Finally Having Some Signs of Life?

United Hampshire US REIT ("UHREIT") has been one of my lacklustre US REIT investment holdings inside my portfolios despite no apparent bad news like those facing US Manulife REIT. While most REITs such as Keppel DC REIT, DigiCore REIT and Mapletree Industrial Trust sprang back to life and shot up vivaciously over the past few days, UHREIT just went up a tiny bit and laggard far behind. It has tumbled 28% from US$0.625 per unit as at 31 August 2022 to US$0.45 per unit at one point in time during early January 2023. I was beginning to get worried that there maybe some extreme bad news like fraud that has not been officially released.

1.What happened to UHREIT?

I thought that there maybe certain news that I have missed out on UHREIT. So I reached out to a fellow investment blogger, Happy REIT Investor, whom I recalled is similarly vested in UHREIT. For those interested, please refer to the comments section for the insights shared by Happy REIT Investor in his recent portfolio posting. You can see our discussion there on UHREIT.

(Fyi: Happy REIT Investor is one of the few bloggers who has already attained the sacred financial independence with a sizeable investment portfolio built up through his astute investment skills). 

2.UHREIT Distribution Yield

The current distribution yield of UHREIT is 11.75% based on its unit price of US$0.495 per unit and annualised 5.82 cents of payout. Its upcoming year end results will be released on 22 February 2023.

For those like me who pursues an income investing strategy, the ups and downs in terms of the pricing of a stock does not really matter if one adopts a long term view. As long as there are no frauds or major bankruptcy of the major tenants, I think that one can always wait it out while collecting the dividend payout. 

Parting thoughts

I am actually thinking of whether to add on to UHREIT. However, it is currently already taking up 10% of my overall equity portfolios and thus will increase my concentration risk. For 2023, I intend to diversify and build up more investment holdings in non-REITs sector assets. 

For those vested in UHREIT, will you still be holding on to it despite the lackluster price performance since IPO? What are your thoughts?

Digicore REIT Self Implosion- 58% Plunge In Market Valuation Within 1 Year And Is It A Star Buy Now?

Digicore REIT is one of the worst performing SREITs over the past 1 year. From its peak of US$1.20 per unit during Jan 2022, its unit price dropped to US$0.50 as at 31 October 2022. This is a shocking plunge of <58%> of its market valuation, all in less than 1 year. If one had subscribed to its IPO in December 2021 at US$0.88 per unit, the loss would still have been a mind-boggling  <43%> decline in original investment cost. Current market price of Digicore REIT is languishing between US$0.50 to US$0.60 per unit. As at 22 November 2022, its unit price of S$0.555 means that it is at an annualised distribution yield of 7.42% which is way higher than what Mapletree Industrial Trust (6% yield) and Keppel DC REIT (5.6% yield) are offering. In addition, its future distribution is expected to grow 2% with the upcoming partial acquisition of Frankfurt data centre. So whatever happened to Digicore REIT for the market to punish it so severely? Is Digicore REIT a starbuy currently or is it a dividend value trap? 

1. Investors are very worried that the Tech Industry woes will spill over to Data Centres.

The main concern for investors seems to be that the current crisis faced by the Tech Industry will lead to many default in rental as well as lowered demand for data centres. It probably does not help that Digicore REIT had earlier announced that one of its major tenants, Sungard Availability Services, had filed for bankruptcy protection. 

In response to questions from unitholders, Digicore REIT disclosed on 17 November 2022 that it has reached an agreement with Sungard to amend the lease to allow for an orderly exit of the premises by 31 December 2022.

Digicore REIT also have in hand a surety bond or essentially a security deposit for two months rent. Moreover, the space in question is only 37,000 sqft and the REIT is confident of backfilling this space quickly. 

2. Interesting potential upsides of 25% increase in rental rate due to high demand for data centres and low supply.

Based on the heads up provided by the Senior Management of Digicore REIT on 17 November 2022, I thought that it is interesting that rental rates in future maybe renewed at a double digit rental reversion. Moreover, the data centre sector has historically remained stable even in the face of a changing macro environment, including the 2007/2008 Global Financial Crisis.   

Parting thoughts

Personally, I think that Digicore REIT is a starbuy at the incredulous 7.4% distribution yield on offer given the market expectation of an eventual 5% terminal borrowing rates by the US Federal Reserve. The huge decline in its price does offer one a relatively safer margin of error and to wait out the catch up in its market valuation.  I reckon that a 20% increase in future market valuation is certainly possible and will collect the high distribution yield while waiting. I have slowly been accumulating additional units of Digicore REIT during this down period. Saying that, I plan to keep my investment cost in Digicore REIT to less than S$50K.