Bought into SPH Reit this week at S$0.955. 


I like the simplicity of this Reit with assets of Paragon and Clementi
mall, which I visited often.
Paragon is not just retail but also consists of medical suites/offices. In
my opinion, it is definitely one of the malls in Orchard area that has
relatively higher human traffic. Clementi mall is suburban and co-located with MRT. It
is always crowded be it weekdays or weekends when I patronised.
In my opinion, SPH Reit has a very well mix of good services even with just 2
assets. Gearing of 25% is considered one of the lowest among S-reits with
possible injection of Seletar mall into the Reit when the time is riped.
Paragon and Clementi are undergoing AEIs.
Paragon AEI is to replace the air handling unit and is expected to have
additional 7K sqft NLA by mid-2018. Part of the space has already been
pre-leased. As for Clementi Mall the AEI is being planned and due for
completion in the next 2 years.  
The downside is projected yield is also lower at 5.8% with no discount
to current book value. Furthermore with just two assets, it is also not
well diversified and if without addition of new asset, DPU growth is limited to
just rental reversion and AEI. Retail sector is also not seeing the best of
outlook ahead which can further dampened its performance going ahead. 
In view of the economic slowdown and the deepened crisis in the sector I
am working in, I think SPH Reit is one stock that is less volatile which is suitable
for my risk versus income appetite.

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10 thoughts on “Recent action – SPH Reit

  1. Hi Rolf

    I think SPH Reit is a relatively safe bet in a volatile market. Gives pretty good yield income play for now.

    1. Hi B,

      I agree totally. It's perhaps comparable or even safer than some of the recent retail bonds issuance!

  2. Hi Rolf,
    Welcome on board SPH Reit. I go to Climenti Mall quite often too. Probably may have seen you sometimes. Haha.

    Cheers,
    Farmer.

  3. Very interesting…I'll look at SPH Reit.

    Have you looked at Frasers Centerpoint Trust? 70% of their income is from Northpoint (Yishun) and Causeway Point (Woodlands) – both are the primary malls within their catchment areas, with MRT access and heavy foot traffic. Maybe similar to your Clementi Mall (?).

    1. Hi BlackCat,

      Yes. I know about FCT (used to own it). Equally good n very similar, just that gearing slightly higher and yield slightly lower.

      I just went to North point yesterday, it was very crowded!

  4. good choice, this counter was still green despite the bloodbath this year.. holding up very well..

    1. Hi PI Trooper,

      Nice logo you have. I have not look into soilbuild so I cannot comment.

      But, good luck for your investment.

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