It is a wet evening and the stock market wasn't all that inspiring either. So, I decided to look at what I have bought recently and how they are doing.
First REIT
I bought some at 95c and again at 96.5c. Volume expanded today as price closed at......
First Reit is a relatively sound purchase, however AIMS AMP has a balance sheet of poor performing assets, and have recently agreed to sell one of their better positioned assets at less than their original purchase price.
Asset peformance is likely to struggle once head lease agreements expire, potential investors have to consider whether the current passing rentals within each property are likely to be sustainable and whether there will be an increase in vacancy rates given the majority will be leased out on a multi tenanted basis. Suggest a drive by the properties, as opposed to looking at yields and charts!
Why do you think First REIT is a relatively sound purchase? Sound in what sense? Relative to what?
Why do you think that AIMS AMP Capital Industrial REIT has poor performing assets?
As for selling an asset at under its original purchase price, this is hardly useful. We should look at the asset’s current valuation instead. There is absolutely no point in talking about how much the asset was worth some years ago. After all, one consideration is the current valuation of a REIT’s assets when we decide whether or not to invest in the REIT.
Why do you think the recent divestment by AIMS AMP Capital Industrial REIT was one of their better positioned assets?
Wondering whether current rents are sustainable in future and whether there will be an increase in vacancy would remain in the realm of guesswork. Market forces will determine much of these.
If we take your suggestion to drive by a REIT’s properties and not just look at yields and charts, should we take a flight to Indonesia to look at First REIT’s properties as well instead of relying on their reports?
@AK71:
My partner took a personal trip to Indonesia to look at First REIT’s properties. His business associate took him on a helicopter flight to view all the properties in Indonesia. They cater to the higher end, offering literally 7-star medical service.
This, coupled with the rental structure and no-FX risk structure, my partner decided to take a significant stake in First REITS last year.
Hi ana,
Congratulations to your partner on a most astute move. :)