I manage to divest all my 15 lots of Ascott Reit today at a price of $1.31.
This has been a very good performing counters for years and gave me a very decent capital and dividend gains. Thank you Ascott. However, given the recent run-up for Reits in general and the reason why I would like to divest in this Reit which I have explained in detail here, I decided to let it go. This also means that I will not be getting the dividends in the month of February which they have announced at around $0.042/share for the 6 months.
There are really nothing much to add for the reason for my divestment other than the fact that their dividends have been somewhat at par and not increasing while their asset base grows and there is a high likelihood that you will be forced to participate in the rights issue to avoid dilution. The dividends at current price still remain at around 6.4% yield so it’s still overall very decent, though the cost of borrowings is at 3% and the distribution represents a full 100% payout.
The recent run-up in Reits is very much akin to the great 2013 run where the yield spread with the risk free rate has tightened. I think it’s a very good chance at this time to divest the weaker Reits you have in your portfolio and restructure the portfolio. If you are those with very little cash holdings, this could perhaps be a good time to divest some of the holdings, realized the capital gains and hold the cash as a potential warchest for future opportunity.
With this divestment, my only Reits holdings in the portfolio is left with Fraser Centerpoint Trust (FCT), Fraser Commercial Trust (FCOT) and Mapletree Greater Commercial Trust (MGCCT), which I thought represents a very strong case why they deserve to be there more than the others.
This is just a quick update and I will update my portfolio soon. Thanks for reading.
Any divestment for you so far? What do you think of the recent Reits run-up?