Summary of September 2019 Transactions

This month, OUE Hospitality Trust has disappeared from my stock portfolio due to its merger with OUE Commercial Reit. After the merger, OUE Commercial Reit makes up 3% of my stock portfolio. I am not sure if there is anything to applaud with regards to the merger as I am not familiar with OUE Commercial Reit. For now, I am not doing anything until I find time to look into the assets of OUE Commercial Reit.

I know there is a hype about the IPO of LendLease Commercial Reit recently. The IPO ends today and I am giving it a miss after much consideration. There is only two assets in its portfolio which is 313 Somerset and Sky Complex. There is a possibility the manager will inject more properties into this Reit in the future such as Parkway Parade or Paya Lebar Quarters. For now, I am keeping watch on this Reit as the concentration is mostly on 313 Somerset.

I continued my monthly screening for dividend stocks using Stocks Café and did one personal analysis of Haw Par Corporation Limited. Haw Par did not qualify my criteria of a dividend stock as the dividend yield is too low. Hopefully I am able to find a good dividend yielding company over the next few months.

One good news I received is the proposed acquisition of Mapletree Business City Phase II by Mapletree Commercial Trust. There will be a boost of dividends if the acquisition manages to go through.

That is all the updates that I have!

Value Unlocked with Mapletree Commercial Trust Proposed Acquistion of MBC II

Mapletree Commercial Trust current own VivoCity, Mapletree Business City I (“MBC I”), PSA Building, Mapletree Anson, Bank of Amercia Merrill Lynch HarbourFront (“MLHF”) in its portfolio.

This is one piece of news investors of Mapletree Commercial Trust has been waiting for. On 27th September 2019, Mapletree Commercial Trust has proposed the acquisition of Mapletree Business City (“Phase 2”). Since its IPO in 2011 to the current 2019, Net Property Income has increased from S$124 million to S$347.6 million. Distribution Per Unit (“DPU”) has increased from 5.271 cents to 9.14 cents.

There are various reasons or rationale the manager has provided behind the acquisition such as owning the workplace of the future, asset class provides steady rental growth at low volatility, stable cashflows with embedded rental growth from high quality tenants, further enhances Mapletree Commercial Trust portfolio and attractive valuation and NPI, DPU and NAV accretive etc. I wanted to highlight the point that with the acquisition, Mapletree Commercial Trust has basically gain control over the Alexandra Precinct!

Now, here comes the most important part. With the acquistion, value is expected to be unlocked! Net Property Income (“NPI”) yield is estimated to increase from 4.7% to 5.0%. Distribution Per Unit is estimated to increase from 9.14 cents to 9.51 cents. Net Asset Value per unit is estimated to increase from 1.71 cents to 1.74 cents.

Lastly, the acquistion will be funded by debt and equity. The manager has proposed the issue of up to 500.0 million new units. Investors can expect

  • A private placement of New Units to institutional and other investors; and / or
  • A non-renounceable preferential offering of New Units to the existing unitholders of MCT on a pro rata basis

The EGM is to be held on 15 October 2019 (Tuesday) at 3.30 p.m.

I am looking forward to the preferential offering!

Screening For Dividend Stocks In September 2019

How do I find stocks to analyse and decide if it is worth investing? Every month, I will always start by running the stock screener that I have saved on Stocks Café. There are several websites that offer such a tool to screen for stocks using conditions that you can set such as dividend yield, P/E ratio, P/B ratio and Market Capitalization etc. Some website that offers such a tool are Singapore Exchange, FSMOne and StocksCafe.

The stock screener offered by Stocks Café allows me to save the conditions that I can pre-set. You can check out my review here on the Stocks Café Dividend Stocks Screener (Read more: Screening For Dividend Stocks Using Stocks Cafe Stock Screener).

Below are the top 10 dividend yielding stocks as of 25th September 2019.

Name Current Yield % P/E P/B Market Cap
Haw Par 8.569 16.46 0.979 3B
Cromwell REIT EUR 7.24 11.34 0.957 1.3B
CapitaRetail China Trust 7.221 9.39 0.937 1.8B
Cromwell REIT SGD 7.183 11.11 0.944 1.9B
Frasers Logistics and Industrial Trust 7.074 12.05 1.332 2.7B
Frasers Logistics and Industrial Trust AUD 6.854 12.82 1.37 2.9B
Mapletree Industrial Trust 6.1 17.27 1.624 5B
Frasers Commercial Trust 5.963 9.74 1.036 1.5B
SPH 5.869 13.82 0.99 3.4B
Mapletree NAC Trust 5.834 6.58 0.918 4.2B

Haw Par has appeared in my previous screening for dividend stocks. The current yield of 8.569% is misleading and I would have dived into the stock if I have not done my personal analysis of Haw Par. Haw Par has paid out a special dividend last year and that is why it always appear top in my screening list for dividend stocks.

There are a few stocks in the above list that I am interested in. Thus, they are possible candidates to add to my stock portfolio after I have done my personal analysis of them. They are Cromwell REIT, CapitaRetail China Trust, Mapletree Industrial Trust and Mapletree NAC Trust. All of them have a current dividend yield of above 5% which is one of the conditions for dividend stocks.

One of the best feature about Stocks Café is that the description gives you a summary about the REIT

Cromwell REIT

Cromwell European Real Estate Investment Trust engages in the investment in property. It focuses on diversified portfolio of income-producing real estate assets in Europe. It operates through the following property sub-portfolios: Office, Light Industrial, and Other. The Office asset class includes Netherlands, Italy, and Finland. The Light Industrial asset class comprises of Netherlands, France, Germany, Denmark, and Italy. The Other asset class focuses on Italy. The company was founded on April 28, 2017 and is headquartered in Singapore.

Capita Retail China Trust

CapitaLand Retail China Trust is a real estate investment trust. It operates through the following segments: CapitaMall Xizhimen, CapitaMall Wangjing, CapitaMall Grand Canyon, CapitaMall Xinnan, CapitaMall Erqi, CapitaMall Shuangjing, CapitaMall Minzhongleyuan, CapitaMall Qibao, CapitaMall Saihan, and CapitaMall Wuhu. It invests on a long-term basis in a diversified portfolio of income-producing real estate used primarily for retail purposes and located primarily in China, Hong Kong and Macau. The company was founded in 2006 and is headquartered in Singapore.

Mapletree Industrial Trust

Mapletree Industrial Trust engages in the provision of real estate solutions and investment in industrial properties. It operates through the following segments: Flatted Factories, Hi-Tech Buildings, Business Park Buildings, Stack-Up and Ramp-Up Buildings, and Light Industrial Buildings. The company was founded on January 29, 2008 and is headquartered in Singapore.

Mapletree North Asia Commercial Trust

Mapletree North Asia Commercial Trust is a real estate investment trust, which invests directly or indirectly in a diversified portfolio of income-producing real estate in Hong Kong SAR, China and Japan. It focuses on commercial assets as well as real estate-related assets. Its objective is to achieve an attractive level of return from rental income and long-term capital growth. The company was founded in February 2013 and is headquartered in Singapore.