Transactions made:
- Added 2,600 units of Lendlease Reit at $0.72 from preferential offering
The remaining units that I got from the preferential offering was allotted to my wife's portfolio. I had also bought Keppel DC Reit in April at $2.08 and allotted them to my wife's portfolio.
Many of us worry about rising interest rate (which leads to higher borrowing cost for reits) and electricity cost (which impacts data centre which uses quite a fair bit of electrcitiy). I think that we are overly worried. Interest rate and electricity cost affects all reits and all businesses. There are mitigation measures that can be taken.
For increase borrowing cost (rising interest rate) businesses, including reits have operated in rising interest rate environment before. Keppel DC already has hedged 76% of loans, average cost of debt is 1.8% and weight average debt tenor is 3.8 years. A 100 bps change would have an approximately 1% impact to 1Q 2022’s DPU....