Cory Diary : Russian invasion of Ukraine - Elite Comm Reit

Ukraine has more than 200k servicemen. For Russia with their military power and size to send less than this number of soldier to invade Ukraine, and splitting their army into three routes seems arrogance resulting them failing their military goals so far. And now with Ukraine activating reservists it seems tough for Russia to fight without significant loss of lives even if they win. Putin has started to use cluster bombs, hitting government building with missiles and deploying thermobaric weapons seem steps of desperation. This will be horrific to Ukraine Civilians as such weapons are indiscriminate and a serious war crime. I wonder which soldiers will obey such orders to kill civilians senselessly in this modern time. Even if Russia win is a lose.

Interestingly, the invasion also resulted in 10 Yr bond yield crushing back to Jan level as people rush for safe assets. Reits started to rebound despite Inflation reeling hard. USD creeping up too. The bank prices that have been spiking past months have already entered discount modes. This allow me to kickstart collection but seems I am a little too eager as my position has increased to more than 5% of the Equity Portfolio. I need to hold my gun tighter when the probability or rate increase likely to be strong ?

So how is Europe Properties impacted or mitigated ?

Elite Commercial Trust

Regearing announced. There is some rent reduction in 11 of the 100 properties. A huge relieve to shareholders as they are now extended to year 2028.

"Together with the 31.6% of the total portfolio by GRI currently with straight leases through to 2028 with no lease break options, this means that 78.6% of the leases by total portfolio by GRI(1) will run straight to 2028 without any lease break options"

However there is also some investment required as follow. This could improve the valuation of the properties such that dividend will not take significant hit over the 3 years period if they go via additional loan.

The only risk left which I am personally concern is exchange rate risk on DPU nevertheless is a good deal overall.

Cheers,

Cory

2022-0302

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Articles in this Blog is personal take and sharing purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Elite Commercial Reit - GBP

For those who are not familiar, Elite Commercial Reit (MXNU) is listed in SGX traded in GBP. Initially daunted by the need to manage exchange rate and it's risk, it is now a part of Cory Portfolio that provide strong dividend yield. It does take time for Old Cory to adapt but he really do. And is even better to do it when rate is favorable. Obviously, high yield is meaningless if the business fundamental is not there as it will not be sustainable.

Fundamental

1H2021 Report

DPU 2.63 in which 0.09 advance has already Ex Div. Annualized yield of 7.85% ( @Price 0.67 )

Gearing 42.1% which is slightly high so further acquisition will need to raise fund

Cost of Debts ~1.9% is quite low.

ICR 6.4x cannot be better

Exchange Rate

GBP has been doing very well against SGD. Current 1GBP = 1.88 SGD. So people who has vested since Oct last year enjoyed further currency gains.

Short and Sweet. 

Roger Out.

Cory

2021-0804

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.