About Dividend Titan
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About Dividend Titan Hello, my name is Willie Keng, Chief Editor of Dividend Titan. Before we go deep into the trenches to build your rich life and make tons of money in the stock market, I like to share with you a bit more about myself. I run a boutique consulting practice helping clients in the investment industry improve their business processes. I’ve written investment frameworks, consulted on investment committees, trained portfolio managers, investment advisors and research analysts to improve their contribution to the work they do. Friends who know me will say I’m an investing nut. For the past 10 years, I’ve run 6-figure portfolios not only for myself, but my family too. The strategy I’m about to share with you is a culmination of my personal investment experience, past work as an ex-research analyst and investment advisor for major financial institutions. Along the way, I’ve decided to pen down all my lessons and mistakes into a micro-brand called Dividend Titan (www.dividendtitan.com). Its sole purpose is investment education. I’ve been round the block. Seen a fair share of clients, friends, family and relatives getting their savings burnt in the stock market. Not because they were any less smart, but they just didn’t understand the right path to investing success. And I believe the purest way to achieve a rich life through investing is in the LEARNING. 1 Table of Contents Introduction ............................................................................................. 3 1. Buying Singapore’s Biggest Industrial REIT ...................................... 5 2. Getting into CapitaLand’s Most Overlooked Brand ............................ 8 3. The One Singapore REIT You Must Own ....................................... 12 4. The Heartland Mall Dominator You Need to Know .......................... 15 5. Buy This Trophy Asset Before This REIT Roars Again .................... 17 6. Collect 5% Dividend Yield, Even If This Stock Goes Nowhere .......... 20 7.Unlock the Entire 5G Revolution in Keppel DC REIT ......................... 22 8. How to Own the World’s Data of Tomorrow ...................................... 25 9. How to Buy Mapletree Logistics Trust ............................................... 27 10. The Healthcare REIT That Never Dies ............................................ 30 Final Thoughts -- Why Singapore REITs are the Ultimate “Wealth Defence” ............................................................................................... 33 2 Introduction Willie Keng, CFA Founder, Dividend Titan Investing in properties is a Singapore Dream. Who wouldn’t like to own something that pays you recurring, passive income quarter after quarter, year after year, no matter what’s going on in the world today? You see, I’m sure you’ve heard of friends and relatives happily sitting on properties collecting income. What’s more, some of the wealthiest people in Asia have built their wealth on properties. No matter what, investing in properties is one way to get rich. But you’ll agree with me, buying properties is a huge commitment. And it’s not cheap if you want to be a landlord in Singapore. The thing is, you need to find your own tenants, manage them and sometimes even have to deal with silly issues, like tenants complaining about replacing lost keys, while you’re enjoying your holidays. That’s why, to me, REITs are a perfect way to get you started to grow your passive income. REITs Might Sound Complex, But It’s Not REITs make money exactly like how a bank does. REITs borrow money, then use it to buy properties that pay them a higher interest rate, or property yield. And they can keep buying as many properties as they like, just by borrowing over and over again. I call REITs a “virtual bank”. 3 The key difference between a bank and REIT is that banks take in “short-term” deposits and lend out to companies and people at a higher yield. While REITs borrow “short-term” money and invest in properties at a higher rental yield. For instance, CapitaLand Integrated Commercial Trust (formerly CapitaLand Mall Trust) borrows money from banks to buy and own several iconic shopping malls like Raffles City Shopping Centre, Junction 8, Funan Mall and many others. So, if you buy CapitaLand Integrated Commercial Trust today, you’d get to own all these retail properties and collect their rental through dividends at a very low cost. But more importantly, CapitaLand Integrated Commercial Trust professionally takes care of all the properties for you — from finding new tenants, to collecting rent from tenants and property maintenance. This saves you the pain of actually running the properties yourselves. That’s why, to me, REITs are a perfect way to get you started to grow your passive income. And that’s why I compiled the 10 best Singapore REITs for you to buy today in 2021. This is an update from my extremely popular article – Your Retirement Guide: 8 Best Singapore REITs to Buy Now 2020, as published on https://www.dividendtitan.com/. 4 1. Buying Singapore’s Biggest Industrial REIT Ascendas Real Estate Investment Trust (SGX:A17U) needs no introduction. It has a market cap of S$12.4 billion. This REIT is one of Singapore’s top 30 companies that is also part of the Straits Times Index (STI) The Straits Times Index (STI) lists out the top 30 Singapore companies based on how valuable they are. This is traditionally Singapore’s largest industrial REIT, owning logistics, warehouse facilities and light-industrial buildings that serve to electronics, food, machinery tenants. But these days, Ascendas REIT have evolved into something else. You see, it’s moving not only into the business & science parks, which has done for them very well. But they also are moving into data centres. It recently announced that it bought 11 data centres worth S$960 million, all of it in Europe. Ascendas REIT Knows Where to Smell the Latest Trends Data centres are a huge asset to today’s digital age. More companies are moving into cloud computing. More people are using smartphone devices. Even homes are getting into the internet of things. The 5G revolution, and all of that above requires a place for data. Data centres act like a home for the internet. When you want to stream a video, post pictures online, or even upload your office documents, you need a physical space to store all these virtual data. That’s why Ascendas REIT wants to get into this game. And fast. 5 By moving into the business, science parks and data centres, Ascendas REIT captures the high-quality tenants of today -- not just government agencies like DSO National Laboratories, the big Singapore banks, or telecommunication companies, but fast-growing technology companies that are generating immense amounts of cash flow. In other words, Ascendas REIT wants companies -- at the forefront of technology, biomedical science, banking and telecommunications – as their paying tenants. Diversification Makes Investing in Ascendas REIT Safe And what’s even better, is Ascendas REIT makes sure that not one of its tenants take up more than 5% of Ascendas REIT’s gross rental income. I believe this is important here. Because no matter how big these tenants are in their fields, Ascendas does not need to rely on any of them to grow the business. You see, if anyone decides to leave the properties, Ascendas can easily find another tenant without worrying about a drop in rental income. During the Covid-19 pandemic last year, even though 9 out of its more than 1,400 tenants pre-cancelled their leases, it didn’t affect Ascendas REIT one bit. In its latest second half of 2020, Ascendas REIT gross rental income grew 12.5% to hit S$528 million. Its total distribution to shareholders grew 9.8% to S$275 million over the same period. If you’d held Ascendas REIT since its IPO in 2002, you’d have made more than 500% on your capital, including dividends. That’s a solid 11% returns per year. Today, its dividend yield is 4.67%. 6 If you’re a long time REIT investor, and you’d like to get into the wave of the internet revolution before the whole thing explodes, Ascendas REIT, in my opinion, is one great way to invest in the next internet revolution through a Singapore REIT. Distribution Per Unit (Cents Per Unit) 18 16 14 12 10 8 6 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Company Annual Report Ascendas REIT is in my best 10 Singapore REITs for 2021 7 2. Getting into CapitaLand’s Most Overlooked Brand Ascott Residence Trust, or Ascott REIT (SGX:HMN) is one of the truly great businesses of CapitaLand. And the man behind Ascott is a visionary. The late Mr. Ameerali Jumabhoy was always willing to challenge conventions. Without him, CapitaLand wouldn’t have built one of the best trophy assets of today -- The Ascott brand. I’d say Ascott is one of Singapore’s iconic, yet overlooked property brands. Mr. Jumabhoy founded Scotts Holdings (a property company) in 1982. And used it to open The Ascott Singapore (or Ascott) two years later -- the first world-class serviced residence in Asia Pacific at that time. Ascott got its name from its Scotts Road location. And it was inspired by the famous British races at Ascot -- an extra “t” was added to prevent copyright issues. Mr. Jumabhoy had a love for these equestrian sports. At its peak, Scotts Holdings had more than S$600 million worth of assets. Scotts Holdings later on merged with Stamford Group, owned by DBS Land at that time, to form The Ascott Limited. Then, Ascott was bought by CapitaLand Ltd. (a merger between DBS Land and Pidemco Land). 8 Ascott REIT is the Cash Cow of The Ascott Ascott REIT is the biggest hospitality trust in the Asia Pacific region.