Asked by Anonymous
Asked on 24 Sep 2019
This REIT looks really good in my opinion. What are some of the things we all should be looking at? Personally, I am looking at WALE, Occupancy rate and the sponsor is strong.
I think you need to consider the portfolio as well. While the sponsor and cornerstone investor list is strong, the portfolio consists of 2 properties, with around 70-75% of income being derived from Somerset 313. The WALE is pulled up by the Milan property, but that only contributes to 25-30% of income. The WALE from 313 is 1.6 years so that’s something to consider. With the news on Trump (impeachment), there’s also risk climate you need to think about as well. REITs are indeed popular, but suggest to buy with your eyes open if you are going for it. Just my 2 own cents worth...
Personally, there are two sides of the coins based on the assets under the REITs.
1) Since the properties are not so good and medium risk involved due to the lack of diversification, it would be better to wait on the side for better properties to be injected or share price to go lower to account for the risk.
2) Since the properties that would be injected in the future would potentially benefit shareholders with reduced risk and greater returns, it would be better to enter now and hold on with dividends received while waiting for potential upsides.
There are two approaches. Wait for better visibility and lower risk. Or take the risk and wait it out. Is your call to decide which boat you prefer.
I actually really like this REIT haha, in terms of valuations, portfolio and pipeline. Probably the key thing to look at going forward is the sponsor but that’s still a bit of a question mark for me.
There’s an article here with more details if you’re keen :)
I've shared my personal views on the DrWealth blog. It is not without small flaws, but it is ok to subscribe if you think it is valued appropriately in current market conditions.
Go through the prospectus.
Currently, Lendlease has priced the IPO price UNDERVALUED. (Edit: my bad, i mean undervalued relatively to peers. On its own, $0.88 is probably a little over)
Means it's a current good buy going by current market conditions. (if the economy collapses tomorrow, don't look for me.... )
REITs are always popular with Singaporeans and stable, dividend hunters. Lend Lease properties are crowded and full of traffic... It's going to be a very popular IPO. disclaimer: I will be applying online