Sunday, 14 May 2017

Confidence in Ascendas Hospitality Trust Paying Dividends?

I first took note of Ascendas Hospitality Trust following their failure to sell their business. At that time, I was  looking for REITs/TRUSTs with business operations across the Asia-Pacific region, instead of in Singapore only. My consideration for the hospitality sector is that Singapore was projected to have an increase in supply of hotel room over the next few years, and it is impossible to be certain whether more tourists would come to take them up.
Out of curiosity, I decided to go through AHT's financial statements. Besides having a good balance sheet, their exposure in Australia and Japan drew my attention as I believed both countries have the right business conditions such as low interest rate and then-depreciating currency. Moreover the share price was below my target buy price. Not difficult to guess what comes after that right? 😜
Here is an brief overview of AHT's business:
Credit: AHT 4Q FY2016/17 Financial Results Presentation
So how did AHT perform in FY2016/17?
Credit: AHT 4Q FY2016/17 Financial Results Presentation
Based on their 4Q FY2016/17 report on 11May, AHT have performed very well by clocking a record Distribution per Stapled Security of 5.68cents. Their Net Asset Value has also risen from S$0.85 in Dec 2016 to S$0.92 in Mar 2017.
 Credit: AHT 4Q FY2016/17 Financial Results Presentation

Credit: AHT 4Q FY2016/17 Financial Results Presentation
Net Property Income is an important indicator to determine a property portfolio’s profitability. I am interested to find out the breakdown of AHT's NPI by country, as the tourism business is geographical-dependent. 51% of AHT’s NPI comes from Australia and 29% from Japan. To this end, both countries have registered a rise in NPI of 12.9% and 24% respectively. 
Final Thoughts
Glad that my investment in AHT has gone well so far and I remained hopeful for more dividends to come in future. A key risk that I am monitoring closely are potential business disruptions such as AirBnB which has affected the business of traditional Japanese Inns and are gaining much popularity in Australia. Staying alert to the global trends remains important to me as these disruptions could snatch away our "lunches" really quickly!
Together, let us all Go & Huat ah!
GoHuat

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Thursday, 11 May 2017

Rationalising Mapletree Logistics Trust ...



Mapletree Logistics Trust is one of the best performers in my portfolio. My interest in MLT lies in their well-managed business across the Asia-Pacific region and backing by a strong sponsor - Temasek. I managed to sieve out 5 key indicators from their 4Q2016 & FY2016/17 results which could be useful to note:
  • Business performance, in terms of available Distribution Per Unit, has increased by 0.8% Year-on-Year.
  • Increase in Net Asset Value from S$1.02 to S$1.04.
  • Aggregate leverage fell from 39.6% to 38.5%. This could potentially provide MLT with the capacity to borrow more to fund further acquisitions.
  • 81% debt hedged into fixed rates & 72% of income stream for FY17/18 hedged into SGD.
  • Slight rise in portfolio occupancy rate to 96.3% in Mar 17, from 96.2% in Mar 16.
My confidence in their recent acquisitions in Australia and Vietnam has been rewarded, as these properties have been fully leased and are contributing well to the overall Net Property Income. I also like MLT's strategy to divest the old warehouse in Toh Guan, given its limited potential for re-development into a modern facility. The money from the sale can then be reinvested in other warehouses with greater potential. Overall, I still find MLT's business to be well-managed and a quality investment. 
So what’s next? I saw this article on Colliers International for USA and thought that it could potentially serve as a guide for the future Asia-Pacific region.
 
Extracted from: Colliers International, Knowledge Leader
As the e-commerce in the Asia-Pacific region is expected to keep growing, my view is that this would likely to continue fuel the demand for warehouse spaces in the next few years.💪 What do you think?
Together, let us all Go & Huat ah!
GoHuat

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Looking at REITS/TRUSTS for a Change..
CIAO 2016, HOLA 2017

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