SPH REIT Acquires 50.0% Interest in Westfield Marion Shopping Centre, Adelaide, South Australia

When SPH REIT announced its FY19 full year results, I mentioned that the debt gearing currently stood at 27.5% which I felt is low for a retail REIT and there is definitely further room for more acquisitions.

On 7th November 2019, SPH REIT announced the acquisition of 50% in Westfield Marion Shopping Centre, Adelaide, South Australia. The other 50% stake is managed by Scentre Group Limited (“Scentre Group”), the largest Australian Retail REIT.

Westfield Marion Shopping Centre houses 327 tenants and have a high occupancy of 99.3% by Gross Lettable Area (“GLA”). The Weighted Average Lease Expiry (“WALE”) is 6.7 years by GLA and 4.2 years by income.

A picture speaks a thousand words. Post acquisition, you can see that Westfield Marion will make up 15% of SPH REIT’s portfolio valued at S$4.2 billion. The acquisition will be funded via the combination of proceeds from the S$300.0m of perpetual securities issued on 30 August 2019, debt and/or equity fund raising.

Rationale for Acquisition

I shall not touch into the details for the rationale for acquisition as you can find the details from the presentation slides. The important to me is the post acquisition DPU on whether it is accretive or not.

  • Deepens strategic presence in Australia with entry into attractive and stable Adelaide market.
  • Dominant, destination lifestyle mall in South Australia.
  • Complementary acquisition, adding to resilience, diversity and quality of SPH REIT’s portfolio.
  • DPU and NAV per unit accretive transaction.

Pro forma FY2019 DPU

Below is the illustrated Pro forma based on FY2019 DPU. We are expected to get 0.09 cents more post acquisition. Oh well, not much difference in terms of dividends to be collected.

The Best Fixed Deposits of November 2019

The next holiday most of us are looking forward to is probably the Christmas Season. In the month of November, banks have launched their Fixed Deposit Christmas Promotion where we can look forward to some attractive interest rates.

For those who has a lump sum of cash and can afford to lock down the money for 12 months or more, I certainly do recommend placing the money into fixed deposits as compared to the Singapore Savings Bonds. The reason is that for a short term period of 12 months, the interest rate for Singapore Savings Bonds has fell tremendously to 1.56% (Read more: December 2019 Singapore Savings Bonds is 1.71%)

Maybank is a clear winner here with interest rate of 1.88% for a 12 months placement. CIMB Bank is in the second place with their Fast Fixed Deposit Christmas Promotion interest rate of 1.80% p.a.

CIMB Fast Fixed Deposit Christmas Promotion

Interest rate: 1.80%, Minimum Placement: S$10,000, Promotion Valid Until: 30th November 2019

The total interest that you will receive if you place S$20,000 for 12 months is S$360.

Hong Leong Finance Fixed Deposit

Interest Rate: 1.73%, Minimum Placement: S$20,000, Promotion Valid Until: Not stated

Hong Leong Finance seems to have increased their interest rate for S$50,000 to less than S$100,000 deposit for a 12 month period from 1.75% to 1.80%.

The total interest that you will receive if you place S$20,000 for 12 months is S$346.

Standard Chartered Bank (Singapore) Time Deposit

Interest Rate: 1.60%, Minimum Placement: S$25,000, Promotion Valid Until: 30th Npvember 2019

The total interest that you will receive if you place S$25,000 for 9 months is S$300.

MayBank Singapore Dollar Time Deposit

Interest Rate: 1.88%, Minimum Placement: S$20,000, Promotion Valid Until: Not stated

The total interest that you will receive if you place S$20,000 for 12 months is S$376.00. However, there are some catch should you choose to place your fixed deposit with MayBank

  • You need to have a MayBank Current or Savings account.
  • For every S$1,000 deposited into the CASA Account, S$10,000 can be placed into the Singapore Dollar Time Deposit, subject to a minimum of S$20,000 in Time Deposit and the corresponding minimum deposit of S$2,000 in the CASA Account.

December 2019 Singapore Savings Bonds is 1.71%

The effective interest rate for December 2019 Singapore Savings Bonds (GX19120T) fell to a new low which is 1.71% if you held it for 10 years. The interest rate is the lowest and the worst since launch. The minimum amount you can purchase for Singapore Savings Bonds is S$500. If you decide to hold and sell it for 1 year, the effective interest rate is 1.56%.

If you have monies sitting in your Supplementary Retirement Scheme account, why not consider placing SRS monies with Singapore Savings Bonds for a higher interest? (Read more: Purchase Singapore Savings Bonds with SRS in 2019)

If you have 10K or more and can afford to lock down the money for 1 year or more, you can consider fixed deposits as compared to Singapore Savings Bonds for that higher interest rate.

DBS Multiplier Account + Singapore Savings Bonds

If you hold a DBS Multiplier Account, you can perhaps try the hack I previously wrote about to achieve a higher interest rate payout. (Read more: Earn More Interest With DBS Multiplier Account + Singapore Savings Bonds).

Tracking Singapore Savings Bonds via Stocks Café

My favorite website, Stocks Café has introduced a new feature to allow adding of Singapore Savings Bonds into your portfolio. If you didn’t know, I signed up as a Friend of Stocks Café as my most favorite feature of Stocks Café is the automated tracking of dividends payout.

I have renewed my subscription with Stocks Café and this is the second year that I continue to use Stocks Café to track my dividends.

Tracking Singapore Savings Bonds via My Savings Bonds Portal

MAS has launched My Savings Bonds Portal where you can track your Singapore Savings Bonds purchases separately from your stock purchases. I have done up a simple guide here. (Read more: Guide to My Savings Bonds Portal)