You see, I like idiot proof investments.
Like what Warren Buffett says,
You should invest in a business that even a fool can run, because someday a fool will.
--Warren Buffett
So I tend to short list really simple investments. They may not give much return, but to me I'm ok with pretty average returns, I like to sleep well at night, the company has a low chance of going belly up and that's good enough for me.
Today I'll write a little on ParkWay Life REIT.
Parkway Life REIT ("PLife REIT") is Asia's largest listed healthcare REIT. It invests in income-producing real estate and real estate-related assets, used primarily for healthcare and/or healthcare-related purposes. As at 30 June 2017, PLife REIT's total portfolio size stands at 49 properties totaling approximately S$1.7 billion.
Basically, it's a REIT which owns properties and the properties are rented out to healthcare companies like hospitals, and the hospitals are set up in those properties. Usually, these are long leases, cos hospitals don't really like moving around all the time. It's not like some retail REIT where there's a lot of turnover if business doesn't do well...
A quick look at the properties makes it obvious that it's concentrated in Japan.
Not too bad cos Japan has an aging population, so healthcare would be a concern for them.
Other properties are in Singapore and KL.
Both being rented out to high profile medical centers.
At the time of writing, current price is $2.72
Looking at the last 12 months of dividend, $0.128
Which is 4.706%
Again... this is not too shabby.
FD rates are ranging around 1%
Once again, what am I looking for?
Stability of dividends, low risk of bankruptcy, potential capital appreciation.
I think that in terms of stability of dividends and low risk of bankruptcy, this REIT has it covered.
Although the probability of capital appreciation would not be very high.
Cos even though Singapore and KL properties would likely appreciate well within the next 30 years.
It's unlikely that the Japanese properties would do as well.
They may not do poorly, but I'm not expecting the property appreciation to be like that of SG or KL.
Considering that the properties are mainly in Japan, any appreciation of SG / KL properties, will just be diluted amoungst the other Japanese properties.
Ok, some people may think my analysis is pretty light...
Yes, I like it that way. If I need to scour through financial statements means that the company is too complex to be run by a fool. I like my investments to be easy to understand.
The debt limit for SG listed REITs is 45%. So I'm also not too concerned with over-leverage.
So do I think these simple investments will be the next Facebook? Of course not.
But it's good enough for my purposes and that's all I need. A good simple stable investment which will provide fair enough returns and give me a good night's sleep.
This is my own opinion. Do not take it as a recommendation to buy, if you want to buy, please do your own research. I do not own ParkWay Life REIT now, maybe I will in the future. Past performance is not indicative of future performance.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "blanjah" me 1/4 cup of my morning coffee pls.
Many thanks for continuing to come to this blog to read my posts.