Wk 28: Dividends from SPH Reit was the Highlight!

Was extremely delighted to see that SPH Reit increasing its quarterly dividend distribution again!

Below is the chart from SPH Reit that shows the profile of its dividend distribution in the last seven quarters.

Understandably, COVID19 had hit it and its shareholders hard in 2020. We had to accept 1/4 of the typical quarterly dividend and pray hard that COVID would pass and dividend distribution would be restored.

While COVID is still with us, we have learned to live with it by making changes to our lifestyle and doing widespread vaccination among the population. Footfall of Heartland mall has largely returned and tenants’ sales has restored.

As a result, retail mall reit companies are feeling less anxious about cashflow and thus having more confidence to restore dividends.

Based on the last 4 quarters, SPH Reit is providing shareholders with 4.5% yield. If the next quarter is also 1.2 cents or so, then the yield would increase further to 5.3% which is back to the “good old days”. Looking forward!

SPH Reit has been a steady dividend company to me until last year.

As I like this stability, I have held its shares since its IPO in 2013. It has been one of my Top 10 holdings until recent years when I decided to pivot towards more Blueish chip companies. And among the Reits, that means the likes of the Ascendas, Capitaland, Mapletree linked reit companies. As I bought the shares of these blue chip reits and did not add on to SPH reit, it has fallen out of the honours list.

The downside of SPH Reit has always been its size. It is small and has not been able to grow.

Furthermore, I think its management is also too conservative and its sponsor (SPH) was not willing to give up some of its properties like Seletar Mall to SPH Reit. Maybe SPH needs the cashflow from these properties to support its bleeding media business.

As a consequence, its profile has weakened a lot especially as more and more large reit companies were listed and providing investors with new and better reit options to invest.

Having said that, SPH Reit is still a good company to hold. So unless I need the cash, I would just hold on to its shares and collect 5% dividend yields year after year. Not a bad thing too for passive income.

Other than the SPH Reit dividend announcement, there was no other highlights in my investment activity that is worth sharing with you.

From next week onwards, more companies would be reporting their first half results and dividends. So, let’s sit back together and enjoy the ride as dividends come in. I believe there would be more good news like SPH Reit coming our way.

Wishing all a great investment week and stay safe.

Regards,

Warriortan

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