Singapore REITs — one of my favourite investments.
What I found surprising after interviewing (over the past two Saturdays) CEOs of the Singapore REITs was this — Singapore REITs are incredibly resilient and adaptable.
Since the COVID pandemic last year, for instance, retail REITs saw their food traffic and tenant sales quickly going back to pre-COVID numbers.
I saw Singapore REITs acted in a social responsible way — not only balancing their distributions to unitholders with helping tenants defer some of their rents.
I learnt that it’s not simply about profits in the hardest of times.
But managing tenants (customers) so that landlords can help to retain their tenant relationship in the future.
In my opinion, that goes a long, long way for landlords.
But what I found more interesting was this.
(me, all serious, on the left with Mr. Sanjeev Dasgupta, CEO of Ascendas India Trust)
Singapore REITs: The one thing you need to know
Listen to this: Many Singapore REITs are diversifying their portfolios in a big way.
And I realized that our Singapore landlords are buying properties outside their traditional sectors.
Let me explain.
“What opportunities are you seeing right now?” I asked each of the Singapore REITs’ CEOs.
And here’s what they personally shared.
Singapore REIT #1: Ascendas India Trust
Ascendas India Trust‘s CEO, Mr. Sanjeev Dasgupta shared he’s adding more logistics facilities, on top of their IT business parks India.
Ascendas India Trust (SGX:CY6U) is a major industrial landlord.
After India’s tax reforms made it favourable for supply chain businesses, many big companies are moving into regional distribution centres in India.
And Mr. Sanjeev saw opportunities for these companies to rent large, high-quality warehouses.
That’s why Ascendas India Trust are quick to pull in big tenants like Pegatron — one of the largest Taiwan electronics maker to take up a logistics facility in Chennai.
Mr. Sanjeev also knew the future of e-commerce — Amazon and Flipkart, India’s biggest online retailer are also major tenants of Ascendas India Trust.
Singapore REIT #2: Ascendas REIT
Ascendas REIT (SGX:A17U) is moving beyond its traditional industrial buildings.
It’s transforming its older industrial properties into “Hi-tech” parks.
These newer industrial properties allow companies to conduct extensive R&D type of work.
Think of a food company conducting food science research in a lab. It’s different from the noisier, heavier type of manufacturing companies.
But the biggest industrial Singapore REIT is more than that.
Today, Ascendas REIT is one of the biggest data centre providers in Singapore.
And Mr. William Tay, CEO of Ascendas REIT sees his REIT as a “distribution of data”.
With the huge growth in e-commerce, more and more companies need data storage.
That’s why he is loading up the REIT on data centres in the U.S. and Europe.
(me with Mr. William Tay, CEO of Ascendas REIT)
Singapore REIT #3: Ascott Residence Trust
Ms Beh Siew Kim, CEO of Ascott Residence Trust (SGX:HMN), told me that she’s expanding into student accommodation.
“There’s a huge domestic market for student accommodation in the U.S”. says Ms Beh.
Student accommodation provides “rent stability”.
And typically, a rent would last for a one year.
In fact, student accommodation is one of the more resilient assets during the COVID pandemic.
Ascott Residence Trust is Asia’s largest hospitality REIT, with a lodging property business across serviced residences, hotels and rental housing.
Singapore REIT #4: Sabana REIT
For Sabana REIT (SGX:M1GU), Mr. Donald Han shared enthusiastically with me on the new retail component in the industrial property portfolio via the New Tech Park mall, or NTP+.
This mall has opened in 2Q 2021.
But what’s different is that unlike many of the “Orchard Road” type big shopping malls or heartland malls, NTP+ is catered to the nearby office workers.
In fact, more than 60% of the tenants are selling food & beverages.
NTP+ has already secured about 97% of occupied leases.
Singapore REIT #5: United Hampshire US REIT
Lastly, I spoke with Mr. Robert Schmitt of United Hampshire REIT (SGX:ODBU) — a traditional grocery & necessity store REIT based in the east coast area of the U.S.
And he shared that the REIT is actively growing the self-storage space properties.
As more and more people and businesses want to “de-clutter” their stuff, simply throwing them away is not the best solution.
That’s why self-storage buildings exist.
And it’s huge in the U.S market.
And that’s what’s prompted United Hampshire REIT to focus on.
Singapore REITs: Still the lazy man’s way to riches
At its heart, I know Singapore REITs have a place in all income investor’s heart. Including myself. They are highly resilient and adaptable, as you can see from COVID. And the growth story, as spoken 1-1 with the CEOs are still strong.
The thing is, Singapore REITs are strengthening their portfolios by buying properties out of their traditional sector.
This makes future distributions (dividends) more stable and consistent.
A key factor that I always look out for when I grow my own stock portfolio.
And if you want to start building an investment portfolio for retirement, dividend investing is, in my opinion, still the best way to start.
Sometimes, investing can be simple.
Always here for you,
Willie Keng, CFA
Founder, Dividend Titan
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