3 High Yield SG Reits That I Bought Recently Part 1


Firstly this is not a call to buy and I am just sharing what I did. These Reits are higher risk and are more volatile therefore it’s better to limit one’s exposure to less than 5% of your portfolio for each counter. Having said that, it’s rewarding if one managed to buy some shunned Reits at bargain prices like I did when I bought Manulife US Reit at 0.75 and Sasseur Reit at 0.66. Today those Reits are currently trading at 22.6% and 21.2% higher respectively. The good thing about Reits is that you get paid while waiting for the price to recover and they are less risky than other stocks as they are backed by Real Estate which is one of the safest assets.

So let's get to it, I bought 20k shares of $Eagle HTrust USD(LIW.SI) or EHT this morning @0.58 which brings my average price for 60k shares to 0.64 which would give me a yield of 10% according to the IPO estimates. In my opinion, the problem with the Queen Mary is overplayed. It is protected by a 20 year Triple net Master Lease which means that the sponsor will pay for all the maintenance necessary to operate the ship. It’s possible that the Long Beach city can take back the lease if the sponsor did not fulfil the conditions of the lease by maintaining the ship properly but that’s unlikely to happen as Urban Commons, the Sponsor does have the funds to maintain it as they got USD169 million from the Reit for the ship. You may wonder why is a rusting ship valued so much and it’s on a 66 year lease on top of that? The reason is that the ship comes with land title rights to 45 acres of waterfront property where the ship is moored (see image). Also I think the reports of the repair estimates to be grossly exaggerated, if you read the comments by the inspector, Pribonic, “The failure of the lifeboats is the highest priority.” Lifeboats for a ship that is permanently moored? I think he is trying to get the ship seaworthy again.

Other than the ship, I like the other 15 properties. They are freehold and are mostly located in the top Metropolitan areas in the US. Furthermore, 77% of the properties were recently refurbished so we can expect some growth. Majority of EHT’s guest profiles are domestic travellers (91.9%) so it will not be affected much by external factors like the Trade War. The hotels are also run by the 3 largest hotel groups in the world, the kind of chains that I stay in when I am travelling.

What I don’t like is that the Sponsor only holds a 15% stake so there is no full alignment of interest. Also the sponsor is totally unknown and so is their track record so please do your own due diligence. Good luck to those vested.


Read more
23 likes
23 comments
LTKO

But now SGD not strong against USD right? 🤔

Wyne

Reply to @leontankiano : Benefit us investors when buying stocks in USD and settles in S$

  View More Replies
Alchemist

https://www.investingnote.com/posts/1678558

See how next year's first quarter, first month, first week, first day open and close.

watchandlearn

Thank you all for sharing

bart23

Too much scare mongering ... Some even spread nasty rumour the ship is sinking without knowing that this ship is permanently docked and anchor. LOL

AmJay

Bought some at $0.55 too! The yield of between 9% (worst case) and 12% (best case) is too juicy to refuse. Moreover, it owns 17 freehold hotel properties and should not go to zero. So let's hope for the best! 😄

heartlandboy

nibbled some at 55cents too

SirBahamut

bro totally agree with your analysis!

sivas

It seems to me that Urbancommons and City of Longbeach are working very closely to address the issue. The attached document shows the completed work, work in progress and couple of critical items who funding sources has not been identified yet.
The question really is whether Urban Commons is financially sound to address these concerns. At the end of the day, with all these scrutiny from their local press, the city officials will press Urbancommons hard to complete the works as identified in the report.

I am vested.

TheMAOZD

Took a position today at 0.55. Even Asian Pay TV wasn’t trading at this level of yield when it was swimming in debt

Don’t have to be a genius to take up a position. You can’t lose money if you own income generating assets.
A key caveat is it’s gearing ratio, which I find it a bit too high

View More Comments (6)
About Contact Privacy Terms Widgets Store

There are more for you ...

View more and participate in our discussion now. It's FREE.

Creating an account means you’re okay with InvestingNote's Terms and Conditions