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Summary of April 2016 Transactions

Portfolio_201604_Apr

In the month of April 2016, the results of OUE Hospitality Trust rights application was announced. OUE Hospitality Trust Rights was over subscribed. (Refer to OUE Hospitality Trust Rights Issue Over Subscribed) I managed to get my allocated units and a portion of the excess rights I applied for. Thus my holdings for OUE Hospitality Trust increases from 3% to 5% of my stock portfolio.

The market was on a bull run in the month of April as many companies and REITS announce their financial results for 1Q2016. A few stocks I have in my watch list rallied. Examples are ARA Asset management which went as high as S$1.27 before retreating to S$1.19. Thai Beverage went from S$0.715 to S$0.75.

At the last week of April, the Straits Time Index (STI) retreated due to announcement of poor U.S. GDP (Growth Domestic Product) data, blamed to weak business spending.

I am holding on cash with caution. The Singapore stock market looks expensive now and as a dividend investor, the yields of most stocks I am watching does not appeal to me. I am exploring into the Hong Kong stock market as better yields can be found there. Hong Kong stock market is full of “land mines” and having burnt a few times in my earlier investing days, I am trading with caution.

The month of May will be exciting as I receive payouts from the REITS. We shall see if the old saying comes true this year. (Sell in May and Go Away)

Lastly, Happy Labour Day and enjoy your long weekend.

 

Far East Hospitality Trust DPU Rises for 1Q2016

Far East Hospitality Trust Logo

On 27th April 2016, Far East Hospitality Trust announces its 1Q2016 financial results. Gross revenue remains flat at S$27.4 million. Net property income increase slightly by 0.8% from S$24.5 million to S$24.7 million. A Distribution Per Unit (“DPU”) of 1.08 cents was declared which is a 0.9% increase as compared to 1.07 cents in 1Q2015.

The slight 1.9% increase in distribution amount was due to the slight increase in tourist arrivals in the first two months of the year.

1Q2016
(S$’000)
1Q2015
(S$’000)
YoY(%)
Gross Revenue 27,365 27,365 0
Net Property Income 24,679 24,487 0.8
Distributable Amount 19,444 19,203 1.3
Distribution Per Unit (“DPU”) (cents) 1.08 1.07 0.9

Occupancy

Far East Hospitality Trust Occupancy 1Q2016

Hotels

Singapore held the biennial Singapore Airshow earlier this year which provided some uplift. However, the hospitality sector still appears weak due to lack of corporate demand. Revenue per available room (“RevPAR”) was flat at S$141.

Serviced Residences

Revenue per available room (“RevPAR”) for serviced residences fell 8.7% to S$188. This was due to weaker demand as well.

Debt Maturity Profile

$50 million of Far East H-Trust’s floating-rate debt was hedged, increasing the proportion of debt secured at fixed interest rates to 65% from 59%. The current weighted average debt to maturity is 3 years.

Catalyst

Personally, my opinion for the catalyst of Far East Hospitality Trust will be the increase in international visitor arrivals. More international events held in Singapore can boost international visitor arrivals.

Parkway Life REIT DPU Fall for 1Q2016

Parkway Life REIT Logo

On 26th April 2016, Parkway Life REIT announces its 1Q 2016 results. Distribution Per Unit (“DPU”) fell 7% to 2.99 cents from 3.21 cents. The fall in distributable amount was due to a missing one off divestment gains as compared in 2015.

Gross revenue grew by 8.6% and Net Property Income (“NPI”) grew by 8.5%. I will consider the result decent although DPU fell which we know it was due to a missing one off divestment gains.

1Q2016
(S$’000)
1Q2015
(S$’000)
YoY(%)
Gross Revenue 26,901 24,773 8.6
Net Property Income 25,135 23,165 8.5
Distributable Amount 18,097 19,463 (7.0)
Distribution Per Unit (“DPU”) (cents) 2.99 3.21 (7.0)

Net Property Income (NPI)

The increase in NPI was due to rent contribution from the properties acquired in 1Q2015. (Parkway Life REIT Purchase New Japan Nursing Home)

Parkway Life REIT 1Q2016 NPI

Debt Maturity Profile

The weighted average term to maturity of the debt is 3.5 years. 98% of the interest rates are hedged. With the recent 6-year JPY fixed rate notes in March 2016, 34% of the refinancing requirements in FY2017 has been termed out.

Strong Sponsor

IHH Healthcare Berhad (IHH) holds approximately 35.7% of Parkway Life REIT. IHH is 43.4% owned by Khazanah, the investment holding arm of the Government of Malaysia.

Parkway Life REIT 1Q2016 Sponsor

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