Friday 4 August 2017

EzHuat's take on Viva Industrial Trust Q2 results


Viva Industrial Trust ('VIT') is a Singapore-focused business park and industrial real estate investment trust. Its portfolio focuses predominantly on business parks and industrial properties in Singapore.

 Here is a summary of the Q2 report card:
(i) Distribution Per Unit (DPU) achieved a 6.3% hike to 1.861 Singapore cents.
(ii) VIT's gross revenue also grew 18.0% to $27.6m, partly driven by a $2.3m increase in contributions from Viva Business Park (VBP) and a $1.9m contribution from the Chin Bee acquisition.
(iii) Its Net Property Income (NPI) rose 17.5% to $20.2m from a year ago.
(iv) Occupancy at VIT's Jackson Square reported occupancy of 89% with >70 sq ft new leases signed
(v) Completion of Downtown Line interchange at Expo MRT in late Oct 2017 will potentially spur increase in rental reversions.

As a result of VIT's relatively good results, its share price has seen a good upward momentum lately. Now the question is, is it a good time to buy VIT?

While I am vested in VIT, I am of the view that there is nothing spectacular at current juncture. Nonetheless, I like the fact that VIT has positioned itself in pretty good locations. Most of them are strategically located near amenities and accessibility to transportation. With its yield of about 8%, it is indeed quite attractive amongst the reits community.

Some says that its property lease tenure is short as compared to others and likely lead to drop in valuation overtime. They run the risk if the land lease runs out which ultimately will impact their income. Personally, I see positive upside in the short-medium term as long as the Singapore economy remains healthy and VIT successfully renews or sign new land lease tenures.

In industry reit, I typically look at its growing NPI, healthy and rising occupancy rates and manageable gearing ratio. In addition, VIT manages to house a good mix tenant mix such as gym, Decathlon Singapore and a variety of food and beverage outlets. VIT looks stable to me for now and I will continue to monitor further.

What's your take? Feel free to share.

Cheers,
EzHuat


Related post:
Q1 2017 Update for Mapletree Logistics

GoHuat's Views on Current STI Market and Upcoming Plans

 YoloHuat's 1H 2017 Report Ccard

Tuesday 1 August 2017

GoHuat’s Views on Current STI Market and Upcoming Plans


Over the past few months, the STI has risen steadily to the current support level of 3300-3350. One potential thought is to sell off some shares in CPF Investment Account to preserve some of its gains. Based on current market conditions, my target sell prices for the shares in my CPFIA are as follows: OCBC@S$11.50; for STI ETF@S$3.52; and for Singtel@S$4.25. My CPFIA portfolio is expected to achieve an estimated returns of around 2.56% in 2017, based on total dividends over total purchase price. (Note: My first purchase was in end Mar 2017 so I missed out some dividends before that).
I am also planning to start selling my cash investment once STI hits 3.5K or if there is a change in the global outlook. Over the past few months, I have accumulated more Singtel shares. My current portfolio consisted of 3 “anchor” shares - Singtel, MapleTree Logistics Trust (MLT) and Ascendas Hospitality Trust (AHT). These 3 shares formed around 25% of my portfolio in terms of purchase value. The remaining 75% are shared between Finance (i.e. Banks and financial companies) and Oil & Gas shares.
My "anchor" shares have performed well while paper losses in O&G shares remained a sore thumb. However, I am happy that the damage has been reduced by my timely shift into “anchor” shares. My current view is that the O&G sector is starting to show some minor recovery signs, with indicators such as the rise in oil prices and early interest to buy over completed Sembcorp Marine’s rigs. Related to this is a recent report published by DBS on the potential merging of Keppel and Sembcorp Marine. I thought it would be interesting to share my facebook views here:

Will both companies merge? Though there are benefits of cutting cost during this downturn, I still think that the sector has a good chance of recovering  in the longer term. I also agree with this article that a merger will cause a monopoly issue in Singapore. Hence, my current belief is that the likelihood of a merger is low. What are your views on this?
Together, let us all Go & Huat ah!
GoHuat

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