This is a pure-play Australian REIT which offers the following:
- Majority (60%) free-hold
- Relatively long WALE
- Properties are mostly young
However, there are the following considerations that we made as well:
- Exposure to forex risk - AUDSGD is relatively low currently
- Pricing of 2.9% above book value
- Australia's industry is currently at a peak level. Is this sustainable?
With the following considerations, we decided not to apply for this IPO as there are REITs in Singapore that offer good historical yields, good management, and at considerable discounts. It would seem wiser to invest in properties that can be seen and evaluated more accessibly, and at a discount, than something that is relatively more expensive, and harder to evaluate.
Moreover, as per my portfolio on SGXcafe, REITs currently form 13.12% of my portfolio, which is already comfortably within my planned allocation which can be found here. I have plans to diversify my REITs holding slightly in the near future, but I would think that adding a foreign REITs to my portfolio would complicate portfolio rebalancing.
The referendum for Brexit will be held next week on 23/6/16. With the numerous events recently, markets would likely be extremely volatile, and it would seem to be a good time for bargain hunting. It is unfortunate that I am already largely vested in with not much cash holdings to deploy, so I will likely be sitting this one out until the dust settle.
Even though Brexit would probably cause turmoil in the market, I do believe that it is the best decision the UK can make for itself.
It appears that EU is evolving gradually into a financial (mostly done?), political (partially done?) and military (early traces?) union. With such a system, UK with its numerous opt-outs would likely be playing a lesser role anyway. They would face the difficult choice of a closer union (and giving up of more sovereignty such as the pound), or to be tied to a union it has little to no influence over.
The EU also appears to be inherently undemocratic. It is difficult to support a supranational institution that can determine the policies of a country without the ability to put it to the test with an election. Such an institution will grow corrupt and self-serving. As the adage goes, power corrupts, and absolute power corrupts absolutely. With no one to answer to, the bureaucrats would only answer to each other, and would most definitely be looking out to their own interests as top priority. Initially, the policies drafted may benefit the constituent countries, but when the rot of corruption sets in, as it will undoubtedly do so, there will be no escape.
Nevertheless, I do suspect that the Bremain camp would likely prevail in the end as the undecided voters would likely vote for status quo, if we consider previous experience.
Of course, the above is only my personal opinion. Feel free to disagree!
Next week would be a very interesting week!
