Lendlease REIT AGM 2023

 

Lendlease REIT held their AGM on 31 Oct 2023 at 2pm.

Shareholders questions were answered before the actual AGM. You can view Lendlease REIT responses here.

For the AGM slide, you can view them here.

There is nothing special in the AGM slide, so will skip that.

In general, today AGM is quite peaceful as the questions asked in the AGM are quite friendly and Mr Kelvin Chow (CEO) did answer each and every questions well. Well Done Mr CEO :D

Note: What puzzle me is CFO is not seated on stage, not sure if he is present today.

Million dollar question: Will there be any rights issue soon?

Mr CEO mentioned that there wont be any rights issue at this moment as the management team did not even touch base with any banks for such. He understand that there are rumors in the market about potential rights issue due to high gearing ratio and / or buy up the remaining 90% stake of Parkway Parade. He had re-assure shareholders that management are not looking at performing rights at this moment.

What is Management plan to bring down the high gearing ratio?

Mr CEO mentioned that there are various methods such as asset recycling or improve the portfolio valuation. 

Based on Mr CEO response, he seem to be more incline to improve portfolio valuation rather than asset recycling. This make sense to me as Lendlease REIT only have JEM, 313, Sky Complex and 10% of Parkway Parade.

To improve portfolio valuation, Mr CEO gave few examples:

1) There is in built rental escalation (Average 3% pa) in the contract

2) There is around 4% of net lettable area in 313 not deploy yet

3) Tenant Sales is higher than pre-Covid, as such Lendlease can charge higher rents

However, Mr CEO mention they are comfortable with current gearing ratio. He quote an example due to commercials building are many times more expensive compare to industrial building. As such, they will choose the lowest debt interest like perpetual securities. He add on by mentioning banks are confidence in them too as banks are providing unsecure loans to them.

What is the possibility that Sky Italia (Sole tenant for Sky Complex) will exercise its break option in 2026?

Mr CEO mentioned that the possibility is low.

Reasons being:

1) Sky Italia had invested heavily in their CAPEX

2) The rent they are paying now is lower than surrounding building due to first mover advantage. Sky Italia had occupies Sky Complex since 2008 and unfortunately, the annual rental review based on Consumer Price Index (CPI) have not caught up fast enough   

3) Sky Italia credit rating might be even better than Italy rating as a country

Should Sky Italia were to exercise the break option in 2026, they are required to give 1 year advance notice.

To summarize, personally at this point of time after attending the AGM, I do have confident in Lendlease REIT despite the depressing share price. Well, this is a good advantage for shareholder who want to buy more.

Bonus

Lunchbox for shareholder who attend the AGM

Related post:

1) Added: Lendlease REIT (Jul 2023)

2) SOLD: AIMS APAC REIT & ADDED: Lendlease REIT (Mar 2023)

3) Added: Lendlease REIT (Jan 2023)

4) Keppel DC REIT AGM 2022

5) Frasers Centrepoint Trust (FCT) AGM 2022

6) ComfortDelGro AGM 2021

7) First REIT AGM 2020

8) MM2 AGM 2019

9) Perennial AGM 2019 

Added: CICT (Sep 2023)

 

Added 27,000 shares of CapitaLand Integrated Commercial Trust (CICT) at $1.88 on 21 Sep 2023.

This bring my total shares of CICT to 41,000.

Reason for buying:

1) Similar to why I buy it on 2 Mar 2023

2) Anchoring effect on price at $1.88

The anchoring effect is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments.

Added: Lendlease REIT (Jul 2023)

 

Added 11,000 shares of Lendlease at $0.65 on 10 Jul.

In total, I own 86,600 Lendlease shares (Including the DRP of 1600 shares in 30 Mar)

Reason for buying:  

1) Dividend Yield 7.5%

Semi annual payout. Next XD will be in Aug 2023

2) PB 0.83

3) Acquire 10% stake in Parkway Parade

Although I would prefer they acquire Paya Lebar Quarter (PLQ) instead of Parkway Parade. Nevertheless, it is a good start to have 1 new asset in the portfolio as long as it is DPU accretion. With direct linkway to upcoming Marine Parade MRT station (TEL) next year, this will drive more shopper traffic to Parkway Parade.

4) Upcoming Grange Road carpark (behind 313 Somerset)  

There is not much update on this, but it should be completed in 2025 (Link)

Related post

1) Added: Lendlease REIT (Jan 2023)

2) SOLD: AIMS APAC REIT & ADDED: Lendlease REIT (Mar 2023)

Added: Link REIT

 

Added 3,000 shares of Link Reit on 9 Jun at HKD47.40

Reason for buying:

1) Near to 5 years low (Even lower than during Covid)

Link Reit is the largest REIT in Asia by market capitalisation

Image from Proposed Merger of MCT and MNACT (Apr 2022)

I believe one of the main reason for this giant to trade at such low price now is mainly due to Rights Issue in Feb 2023 at 29.6% discount to last trading price (Link). This resulted in lower dividend % due to enlarged share numbers. Nevertheless, the Rights Issue is 240% subscribed (Link).

2) Dividend 5.69%

This time round, there is a scrip option for dividend where we can get discounted shares :)

3) PB 0.64

We are looking at 14% upside for PB if it can hit the average 0.88

4) Hong Kong Retail +7.1% rental reversion

Hong Kong Retail is 52.4% of Link Reit portfolio. As long as the rental reversion is positive, Link Reit should be good.

 

5) Hong Kong Car Parks Income

For some reason, I am very attracted to Link Reit Car Parks related business income (18.8% of Link Reit portfolio) given that they are able to increase their income in all their car parks segment. 

6) Capitaland Investment (SGX: 9CI) alternative

Related post:

1) Added: Fortune REIT (HK 778) - Power of Neighbourhood malls

2) SOLD: Fortune REIT (HK778)

SOLD: Digital Core Reit

 

Sold 32,000 shares of Digital Core Reit on 7 Jun at US$0.46

Total profit is SGD 1186.29 (6.4%) for around 2.5months.

Reason for selling:

1) News of Cyxtera Technologies filed for Chapter 11 (Bankruptcy)

On 4 Jun, Cyxtera Technologies (22.4% of Digital Core REIT’s annualised rental revenue) filed for Chapter 11 (Bankruptcy). 

Mr Market seem to welcome this long awaiting news which cause Digital Core Reit shares price went up instead. 

Since majority of US sponsor who listed in SGX market do not have good history outcome, thus, any profit is consider a good profit.

2) Attractive price  

There are many other more stable stocks with very attractive price mainly due to their recent PP/PO/interest rate hike and etc. 

As such, rotating DCReit out of my portfolio to add in a better player.

To be honest, there are many options to choose which is quite headache too (Will blog on my purchase soon).

Related post:

1) SOLD: ComfortDelGro & ADDED: Digital Core Reit

Royal Caribbean Spectrum of The Seas Cruise Tips + FAQ + Review of The Key

 

I went for the Spectrum of The Seas (5D4N Penang & Phuket) cruise in May 2023.

1) Should you download the Royal Caribbean mobile apps?

YES YES YES.

The Royal Caribbean mobile apps is a must download before you onboard the cruise. 

It contain SeaPass (Room number, Emergency gathering location and etc), Directory (Opening hours, Map), Remainder for your calendar which you set and Etc.

You should download it as soon as possible or when you made the final payment for your cruise.

One of the top reason is it will show you when you can select your check in timing (Estimate 45days before your sail date). This is first come first serve. 

Tips #1: You should select the earliest check in timing if possible.

Earliest timing is 11am. Priority is given to those who reached within their selected check in timing range. 

Board early to avoid the crowd + eat your lunch + settle down + enjoy the facilities (especially swimming pool).

Queue according to your selected check in timing. You will notice the front few lanes are empty as this photo was taken near to their check in timing. 

Tips #2: If you are a swimming pool lover, make sure you pack your swimwear in your hand carry bag 

Your chance of having the whole pool to yourself before 2pm is super high 💓💘

Enjoying my "private" pool

2) Should you purchase The Key (VIP Pass)?

I personally feel that if you have plan to purchase onboard cruise internet OR you hate to be in queue line for more than 20 mins multiple time in single day, the answer will be a big YES.

Spectrum of The Seas full loads is around 5000+++ guests.

I purchased it and I don't regret paying for it. 

The Key Private Time Schedule:

Rock climbing: Day 2 9am to 10am

Bumper Car: Day 3 9pm to 9.30pm

Flow Rider: Day 4 9am to 10am 

Tips #3: The highest % discount I saw for The Key is 30% off

As The Key is limited, you should buy it asap and if you saw the price dropped, you can cancel it and re-purchase at lower price (Info is correct as of May 2023).

Tips #4: The Key benefits

As the number of The Key is very limited, you need to ownself aware of the benefit. Many times, I need to approach the staff to inform them that I am The Key holder in order to enjoy the benefits instead of queueing up like the rest.

 

The Key Welcome Lunch Menu

6oz Angus Filet Mignon

Caesar

The Key departure day Breakfast Menu

3) Eat in Main Dining Room (MDR) @ Deck 3 instead of Windjammer @ Deck 14

Both MDR & Windjammer are complimentary.

MDR is like fine dining while Windjammer is super crowded buffet spread.

To illustrate the differences, I personally will value MDR at more than S$50 per pax per meal while Windjammer at around S$25 per pax per meal kind of quality. Windjammer is great to go maximum twice in your entire cruise because food are 95% same throughout your cruise.

Looking down from Deck 5 at MDR on Deck 3 

Tips #5: Book/Reserve "My Time Dining" time slot ASAP

Everyone love fine dining, especially when it is complimentary. 

If you don't reserve a time slot in "My Time Dining" to dine in MDR, happy queuing for more than 1 hour for a table during peak hour (Hungry man is an angry man).

Tips #6: Time diff of 1 hour when in Phuket

The cruise will adjust accordingly to local time. When reserving "My Time Dining" time slot, please take note of the time diff. 

Eg: If your usual dinner time is SG 7pm, then you need select 6pm on the day the cruise is in Phuket.

MDR Menu (Menu are change daily <3 )

Escargots

MDR Menu (Menu are change daily <3 )

Grilled Jumbo Shrimp

Baked Alaska

Tips #7: You can select as many dishes as you love to have in MDR (Pls don't waste food)

Why crack your brain to choose only 1 Starters / Main Course / Desserts when it is unlimited :D

Tips #8: MDR do have kids menu too

Banana Split in Kids Desserts Menu <3

4) Room Amenities

You need to bring:

• Travel adapters

  

  No Type C or 3pin plug in the room :(

  
  
• Toothpaste + Toothbrush
• Shaver
• Shampoo + Body Wash if you dislike the 2in1 provided in room   
• In room slipper if you dislike walking barefoot 
• Big personal water bottle + Thermal flask if you need hot water (only 3 bottles of water provided in room)

Tips #9: Refill drinking water in Windjammer @ Deck 14

Depending on your own water intake needs, recommend to bring 2L of empty personal water bottle (with big opening mouth like Meiji milk bottle instead of small opening mouth like 1.5L Coca Cola bottle) so that you do not need to keep going up to Windjammer for water refill

Tips #10: "Do not disturb" / "Clean my room" magnet card can be found behind your main door

5) Penang & Phuket Ports

Phuket port is tricky as it depend on the months you are cruising.

Usually for May to Oct, it is at Ao Makarm Deep Sea port area which is super ulu

For Nov to Apr period, it is at Patong Bay, close to tourist area

Estimated time allow in Phuket is from 8am to 8pm.

Tips #11: Phuket local time is 1 hour behind SG time zone. The cruise will adjust to local time.

Penang port is always at Swettenham Pier. 

Estimated time allow in Penang is from 3pm to 8.30pm.

6) Shows

Post covid, all shows and activities are required to queue (Unlike during covid period, where you can reserve shows + activities via apps) except for The Silk Road. 

Tips #12: "The Silk Road" is available to book around 1 month before your sail date via RC apps

7) Default currency is USD 

Tips #13: The highest % discount I saw for Arcade credit pre-board is 20% off

8) Best deck level to stay in

Waiting for the lift is painful as it is always full.

The most happening deck level are in deck 3, 4,14 and 15.

Tips #14: Best to select Deck 5/6 or Deck 12/13 so that you can climb the stairs instead of waiting for the lift.

Tips #15: Choose rooms that are near to lift area so that you don't have to walk too long back or leave your room.

SOLD: ComfortDelGro & ADDED: Digital Core Reit

 

Sold 16,000 shares of ComfortDelGro at $1.17 on 21 Mar.

Total loss including dividend is $5373.30 (-21.5%)

Reason for selling: 

1) Share price remain weak

 I am disappointed with CDG share price especially when the price post COVID is lower than pre COVID.

Even with special dividend declared, the share price still remain sideway. 

2) Weak Fundamental 

Given the current Bus Contracting Model (BCM), I am expecting SBS Transit to further losing market share + lower margin. 

The number of taxis on the roads are decreasing too.

Final dividend for FY22 is 16% lower than FY21 (1.76 cents vs 2.10 cents)

Inflation, rising wages, increasing interest rate and lower margin doesn't look good with CDG too.

Added 32,000 shares of Digital Core REIT on 21 Mar at US$0.43

Reason for buying:

1) Bad tenant news punished the share price

Digital Core Reit manager did response to the news here.

Cyxtera Technologies “represents approximately US$16 million of annualised rent or 22.6% of Digital Core REIT’s total annualised rent” (Link)

22.6% rent is huge impact in the worst case scenario. But given the demand for data centre, I do believe that Digital Core shouldn't have any issue finding new tenants to take up these space.

https://sginvestors.io/analysts/research/2023/03/digital-core-reit-uob-kay-hian-research-2023-03-20

Based on previous Sungard bankruptcy:

https://sginvestors.io/analysts/research/2023/02/digital-core-reit-uob-kay-hian-research-2023-02-06

2) 52w low

IPO was priced at USD88 cents and it went to USD1.13 (52w high).

USD43cents is 51% lower than IPO price and 62% lower than 52w high.

I will term USD43cents as buying a fair company at wonderful price (Warren Buffet prefer buying Wonderful company at fair price).

 

3) Good USD exchange rate at this moment

4) Sponsor seem good 

During Sungard bankruptcy incident, Sponsor step in to provide cash flow support.

Acquisition of 2 data centres was provided with 2 options. Given the market situation, a more favour options was selected.

5) Shares buyback

Digital Core Reit did 11 millions of shares buyback at average USD0.585 recently.

(NEW) Digital Core Reit started another phase of share buyback on 27 & 28 Mar.

6) Improving market rents

7) No loan expiring until 2025 + 75% fixed interest rate

Related post:

1) SOLD: AIMS APAC REIT & ADDED: Lendlease REIT

2) Added: ComfortDelGro (Oct 2021)

3) Added: Keppel DC Reit

4) Keppel DC REIT AGM 2022

5) Added: Mapletree Industrial Trust

6) Mapletree Industrial Trust (MIT) AGM 2022