How a Sleepy Singapore REIT Crushed the Market

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, a sleepy Singapore REIT that I have owned since April 2009.

Based on this trend, the REIT expected to see a rise in demand for nursing homes and hospitals that provide chronic and long term care.According to Asian Development Bank’s estimate in 2021, almost one out of every five Asians will be aged 65 and above by 2050.To tap on the ageing trend, we also need a good business model.

As an investor, I had to stay hands-off and allow time for the REIT’s management to do its good work.There is nothing particularly exciting about ParkwayLife REIT’s business. While I had the good fortune of picking up units on the cheap, it was the time period I held these units that made all the difference.

Across all three calamities, growth in its DPU did not miss a beat, increasing every single year without fail.For one, higher interest rates will increase borrowing cost. Meanwhile, the yield offered by REITs could also be deemed less attractive compared to other investment options.Between 2015 and 2019, a period when interest rates were rising, the REIT’s cost of debt declined from 1.6 per cent to 0.8 per cent.

 

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