Update on SG REIT portfolio
作者：老查理 時間：2019-09-01 12:23:26
Despite the overall positive returns generated from the SG REIT portfolio, it is the underlying subtainable distriutions that really matter most to me. We all know the total returns from both capital gains and distributions/ dividends. In preparation for future retirements or being financally independent, sustainable passive income is a better measurement in my view. With the different purpose in mind, I added two new counters over the year 2019. Unfortunately, the industrial/ logistic/ warehousing exposure remains a significant portion. I still added ERS-REIT as the price went down to a level I think is reasonably prices with attractive yields of 7% as a result of recent recent equity fundraisng and preferential offering. Other industrial REITs in my portfolio remain reasonably or possibly over-priced. On a relative and absolute basis, ERS-REIT seems to be a better choice. Given the enlarged portfolios after its acquiring VIT last year, it is trading at a discount to its large cap peers. Were it playing a catch up, ERS-REIT might offer a decent upside. If not, I am happy to recive distributions on a quarterly basis.The other counter is Accordia Golf Trust (“AGT”). AGT is a business trust, not a REIT but is similar to REITs that will distribute most of its distributable income to unit holders (unlike REITs which need to distribute at least 90% of the distributable income). It is a pure-play Japan in the golf courses. It offers geographical and sectoral diversification to my portolio. However, it might be a cyclical business. Playing golf should be positively correlated with economic conditions. Well, Japan has a lot of retirees who have money and time to spend on leisure. Were the economic crisis to come, yen is likely to go up. Some uncertainties lie ahead but I think it should be doing fine. The way to control risk is through portfolio construction, namely to control exposure to risky assets/ investments.This is a long term process of building a sustainable income stream. Distributions received are mostly re-invested in counters that are at a appropirate price.