UPDATE 19/11/22 Final 13 seats - NEW JOSH TAN FINANCE SUMMIT! Coming To You On 3rd Dec 2022 At SMU School Of Economics. COME LEARN NOW - www.eventbrite.sg/e/450553737357 Secure your seat NOW and tickets sales will close when full! From this event, you'd learn straight away what to look out for year 2023. Key points for this summit that you can walk away with immediately - Revealed: the BIGGEST RISK in the financial markets RIGHT NOW - Revealed: the OPPORTUNITIES to start looking at and buy - Costly mistakes to avoid in this bear market that will save you a lot of money This is a full education summit and you won't need to worry about hearing any selling of products. From this summit, you'd get exclusive memos from my privately managed portfolio. And in addition, if you have personal finance or investing questions, email in now to JOSHTANTAP@gmail.com and I'd address it. Limited seats in SMU School of Economics lecture room! Secure your seat NOW and tickets sales will close when full! BUY your tickets today and you'd get a copy of my e-book "HOW TO $1M - edition June2022" emailed to you immediately! See you real soon!!
Mit is usually based on industrial property where each building likely will last 30-40 years unlike the usual shopping mall reits. You see that as a issue?
@@joshconsultancy My employer has presence in about 12 DCs in Singapore. Among all these DCs, I got more jobs in Equinix. I thought it is worth looking at Equinix as DC operators. Overall my view of DC business is that they are very competitive. Some operators are struggling to get new business.
Currency feels like a 0sum game. It could decline or appreciate at any moment. Plus it's hard to dissect if it was hedged away by reit manager or there is already a natural hedge from income and loan being in the same currency. But ya maybe there is some currency risk
I have a lifelong view and am consistently scooping my REITS whenever they hit Low prices. The dip in dividends is so insignificant IMO. 30 years down the road, I know I’ll be regretting not buying at these prices for huge dividend yields and capital appreciation. A question I ask myself on REITs for example, CICT, is do I see the business failing, in their malls case, SGreans are unique in the sense that recession or not, we will likely still patronise malls as a way of destressing and relaxing. Answer is obvious to me 🎉
At 3Q 2022 DPU will be affected 2.1% with 100 basis points rate hike. This is with only 2.6% of debt maturing 2022. With another 11% maturing 2023, will 100 Basis point hike affect 10% of DPU? But then again…. Fed has hike ard 400 basis points from and those locked in rates expiring at 2023 are most probably during when Fed funds rate at close to 0%. So if we calculate for year 2023, 400 basis point with 11% debt maturity will be 2.1% x 4 (400 basis points) x 5 (as 11% debt mature vs 2.6%) = 40% drop in DPU. Did I miss something in my calculation? Going on to year 2026 when more loans expire, will the REITs default in debt payment?
"Locked in rates expiring at 2023 are most probably during when Fed funds rate at close to 0%. So if we calculate for year 2023, 400 basis point" - this part has conceptual errors. Back then average cost of debt for most S-Reits with good sponsors were around 2-3% not 0%. Refi can be at around 5% now imo. Ascott trust (similar size reit) is issuing one now. Default in debt payment isn't on horizon. Back then in 2008, maybe coz of the credit crunch. Now it's just a matter of refi rate. And how much it inches upwards with each refi. Hope it clarifies
But the impact of interest rate increments is not just on the DPU, it will also affect the ability to expand via yield accretive acquisitions and hence lose its attractiveness in rising interest rate environment as people turn to risk free instruments with attractive yield.
That’s also exactly the point when overselling reduces share price. That provides value investors an opportunity to buy more. With stagnant dividends, your yield on cost still increases.😊
@@HeahMinAn yeah if price falls further on interest rate hikes will increase yield based on prevailing DPU. But be wary of recession causing drop in DPU which will neutralize any effect from it, and price may have to take a further hit.
As Josh says, the difference is businesses that can expand with higher borrowing costs and I think REITS sector in general is constrained in this aspect.
UPDATE 19/11/22 Final 13 seats - NEW JOSH TAN FINANCE SUMMIT! Coming To You On 3rd Dec 2022 At SMU School Of Economics.
COME LEARN NOW - www.eventbrite.sg/e/450553737357
Secure your seat NOW and tickets sales will close when full!
From this event, you'd learn straight away what to look out for year 2023.
Key points for this summit that you can walk away with immediately
- Revealed: the BIGGEST RISK in the financial markets RIGHT NOW
- Revealed: the OPPORTUNITIES to start looking at and buy
- Costly mistakes to avoid in this bear market that will save you a lot of money
This is a full education summit and you won't need to worry about hearing any selling of products.
From this summit, you'd get exclusive memos from my privately managed portfolio.
And in addition, if you have personal finance or investing questions, email in now to JOSHTANTAP@gmail.com and I'd address it.
Limited seats in SMU School of Economics lecture room!
Secure your seat NOW and tickets sales will close when full!
BUY your tickets today and you'd get a copy of my e-book "HOW TO $1M - edition June2022" emailed to you immediately! See you real soon!!
Mit is usually based on industrial property where each building likely will last 30-40 years unlike the usual shopping mall reits. You see that as a issue?
Building leases reits hold are way longer. Key part is MIT is moving in the Data centre direction over last 5y 👌🏻
What do you think of Equinix?
I know who they are but havent studied their books. The may hold more real estate development risk than reits in SG
@@joshconsultancy My employer has presence in about 12 DCs in Singapore. Among all these DCs, I got more jobs in Equinix. I thought it is worth looking at Equinix as DC operators. Overall my view of DC business is that they are very competitive. Some operators are struggling to get new business.
Thanks
Appreciated
I stay in Singapore and my rent on renewal has gone up by 52%. That inflation number of 7% does not reflect the reality on ground..
7% is for all items. Rent hike will
Moderate too at some stage
@@joshconsultancy yes I agree
You're probably missing the risk associated with currency exchange rates
Currency feels like a 0sum game. It could decline or appreciate at any moment.
Plus it's hard to dissect if it was hedged away by reit manager or there is already a natural hedge from income and loan being in the same currency. But ya maybe there is some currency risk
I have a lifelong view and am consistently scooping my REITS whenever they hit Low prices. The dip in dividends is so insignificant IMO. 30 years down the road, I know I’ll be regretting not buying at these prices for huge dividend yields and capital appreciation. A question I ask myself on REITs for example, CICT, is do I see the business failing, in their malls case, SGreans are unique in the sense that recession or not, we will likely still patronise malls as a way of destressing and relaxing. Answer is obvious to me 🎉
Agree =)
Will play it safe and go for OCBC's CPF Fixed Time Deposit instead. 🙏🙏
!!!! You seen "Why I'm Not Buying Any Fixed Deposits And Treasury Bills (T-Bills) ..."? th-cam.com/video/qCNz-snWxrI/w-d-xo.html
At 3Q 2022 DPU will be affected 2.1% with 100 basis points rate hike. This is with only 2.6% of debt maturing 2022. With another 11% maturing 2023, will 100 Basis point hike affect 10% of DPU? But then again…. Fed has hike ard 400 basis points from and those locked in rates expiring at 2023 are most probably during when Fed funds rate at close to 0%. So if we calculate for year 2023, 400 basis point with 11% debt maturity will be 2.1% x 4 (400 basis points) x 5 (as 11% debt mature vs 2.6%) = 40% drop in DPU. Did I miss something in my calculation? Going on to year 2026 when more loans expire, will the REITs default in debt payment?
"Locked in rates expiring at 2023 are most probably during when Fed funds rate at close to 0%. So if we calculate for year 2023, 400 basis point" - this part has conceptual errors. Back then average cost of debt for most S-Reits with good sponsors were around 2-3% not 0%.
Refi can be at around 5% now imo. Ascott trust (similar size reit) is issuing one now.
Default in debt payment isn't on horizon. Back then in 2008, maybe coz of the credit crunch. Now it's just a matter of refi rate. And how much it inches upwards with each refi. Hope it clarifies
If I may chip in my 2 cents for @milo178 to consider, are REITs currently 100% of your portfolio?
@@HeahMinAn very less % of my portfolio.
@@milo178 , sure.
Is time like this that we think 1m65 first then invest
there is logic to building a safety net first i agree =)
where can i find all these info for my own reading?
in summary sections
@@joshconsultancy what website or app?
Thanks for putting up all these Reit contents
Interest rates still going up. Not investing into reits no matter how cheap. Fed will still be increasing interesr rates.
Ah! thought I have enough valid points to debunk it damn haha
But the impact of interest rate increments is not just on the DPU, it will also affect the ability to expand via yield accretive acquisitions and hence lose its attractiveness in rising interest rate environment as people turn to risk free instruments with attractive yield.
Absolutely. The big difference moving forward is businesses who can expand w borrowing cost
That’s also exactly the point when overselling reduces share price.
That provides value investors an opportunity to buy more.
With stagnant dividends, your yield on cost still increases.😊
@@HeahMinAn yeah if price falls further on interest rate hikes will increase yield based on prevailing DPU. But be wary of recession causing drop in DPU which will neutralize any effect from it, and price may have to take a further hit.
As Josh says, the difference is businesses that can expand with higher borrowing costs and I think REITS sector in general is constrained in this aspect.