累積REITs計劃宜加壓力測試(信報)

2016年10月29日
高占 前瞻致勝

上周引用美國1972至2015年合共44年、176季的數據，回顧REITs在四個經濟階段的表現，發現即使在高增長高通脹階段（息口向上時期），REITs平均總回報（包括股價及派息）仍可跑贏股市及通脹。當然，這個數字是長期平均表現，不代表每季回報都是這樣，本周繼續分析累積REITs計劃其他風險及需要注意的地方。
數十年常態會否轉變?

重溫一下，所謂的四大階段包括：
①高於中位數增長與通脹時期；
②高於中位數增長及低於中位數通脹時期；
③低於中位數增長及高於中位數通脹時期；
④低於中位數增長與通脹時期。

長期來看，在這四個階段投資REITs或股市，平均都能錄得正回報，這是過去數十年的常態，只要有通脹，資產價格長期來說必會上升，不過，有沒有機會出現「新常態」？未來是否有可能步入一個經濟負增長及通縮並存的第五個階段？而這個階段的時間又會不會比其餘四個階段來得長？無人可以肯定，但在研究長期投資計劃時，我們必須考慮這個因素。

階段五是「現金為王」的時期，因為大部分資產價格都會下跌，在通縮環境下，租金有下調壓力， REITs收益減少，自然股價也會下跌，而且無人知道這個情況會延續多久。如果這個情況在你退休時開始發生，那麼，累積REITs計劃下的資產總值便會隨REITs價格大幅下跌，你是否能承受這種短期大跌風險？派息減少會否影響你預期的退休收益？雖然在「正常」情況下，經過幾十年的累積，REITs價格及每單位派息應該會有不錯的增長，在一個相對較高的股價或派息水平下出現調整，應該還是可以接受，但筆者認為保守起見，最好加入一個「壓力測試」。
加息陰霾帶來入市機會!

假設你預計退休前需要儲100萬個REITs單位， 每月才有足夠現金流應付退休所需，那麼，你必須想一想如果到時派息比預期少兩成將會如何？如果你覺得錢可能不夠用，就表示你要再考慮增加目標儲蓄單位的數目。
另一方面，退休後的現金流除了依靠派息外，亦可以透過分階段出售REITs單位來填補，你可以悲觀地假設REITs價格在你退休第一年便下跌兩成，其後每年下跌3%，看看在這一情況下，你每年預計所得的派息；加上預計分批出售所得的收益，能否填補現金流缺口。
由退休到人生完結可能有長達30、40年，就算踏入退休之齡遇上階段五，也千萬不要受市況波動影響，過早拋售手上過多的REITs單位，而應該按計劃長期分批出售。

據REIT.com統計，REITs指數在階段一至階段四的年平均波幅分別達15.9%、13.9%、18.2%及20.9%，本港數隻上市的REITs年度波幅達三成的比比皆是，波幅頗高，既然要長期累積，當然在價低時出手較有利，因此，投資者可設定一些指標監察價格走勢及動力，待價格偏低時才買入。
根據以往經驗，當加息風險再受關注的時候， REITs往往會有較大調整；同時，亦會為長線投資者帶來機會。

累積REITs計劃 加息不可怕(信報)

自2009年開始本港樓市展開一輪漫長升浪，儘管間中有調整，但短暫下跌過後又再向上，同期本地房地產信託基金（REITs）價格走勢亦非常強勁，自英國脫歐後顯著上升。有投資達人建議散戶應該長期累積REITs以製造現金流，為退休計劃做準備，同時亦可對沖樓價上升風險。筆者雖然贊成這個說法，不過也想跟各位分析一下有關風險，以制訂一套更佳策略。
可能有部分讀者未有聽過累積REITs投資策略，筆者先在此說明。過去幾年低息環境造就了不少投資者以融資方式將資產規模愈滾愈大，他們透過槓桿買入息口較高的債券，然後將投資債券所得的利息，再投資REITs，當REITs派發股息後，又可重新投入債券或REITs。
同時，由於期間REITs基本保持上升趨勢，因此銀行願意提供抵押貸款給投資者買入更多的REITs單位，情況類似樓價上升後，業主向銀行申請加按套取資金後再投資另一個物業。由於政府推出多輪辣招，現時要「一開二」、「二開三」等等的難度已大幅提升，但投資REITs卻沒有這個限制。
比買樓收租較具彈性
這個方法在過去7年行之有效，現在是否已經到水尾？這個方法的死穴是什麼？其中之一是利率在極短期內大幅急升，這裏指的短期可以是一兩個月，甚至是一兩周，原因可能是港元受到狙擊或其他黑天鵝事件。當然出現機率極低，但如果真的發生，環球股市與REITs價格很有可能暴瀉，當抵押品價格大跌，銀行當然會call孖展，如果手上沒有充足資金的話便會被迫斬倉造成損失。話雖如此，筆者相信這些投資達人一定已想好了Plan B，甚至是Plan C，並持續監控槓桿比例，及保持充裕的流動資金。
不宜誇大加息影響
以上只是極端例子，比較「正路」的想法或者是息口持續攀升，以收息為主要回報的REITs會否表現不濟，由過去幾年的狂牛變成未來幾年的狂熊？雖然歷史不會完美地重複，但觀察歷史數據有助客觀分析，讓我們回顧一下美國由1972年首季至2015年第四季（合共176季或44年）FTSE NAREIT All Equity REITs Index及S&P500 扣除通脹後的實質總回報（股價加股息回報）*。
作者將期間美國經濟界定為4個階段，分別為：
階段一：高於中位數增長與通脹時期；
階段二：高於中位數增長及低於中位數通脹時期；
階段三：低於中位數增長及高於中位數通脹時期及
階段四：低於中位數增長與通脹時期。
增長以季度GDP增長率中位數1.43%作為分界線（年化增長率為5.71%），高於1.43%視作高增長，低於分界線則視作低增長；通脹則以季度增長率中位數0.8%為分界線（年化增長率為3.18%），高於0.8%視為高通脹，反之亦然。統計得出的結果是階段一REITs平均實質總回報為3.8%，高於標普500指數的2%；階段二兩者平均回報分別為8.7%及9.5%；階段三兩者分別為5.4%及6.5%；階段四（即現時宏觀經濟狀況）分別為16.5%及11.8%。
由此可見，加息對REITs影響未必如想像中可怕，下周繼續檢討如何制訂優化策略。
*資料來源來自REIT.com
goaljim00@gmail.com

15 things learned from Starhill Global REIT’s FY2016 AGM

By Adam Wong on November 1, 2016

Starhill Global REIT (SGX:P40U) owns retail and office properties in Singapore, Malaysia, Australia, China, and Japan. Among its properties, Singaporeans would be very familiar with two of Starhill’s retail malls –  Ngee Ann City and Wisma Atria along Orchard Road.

Starhill is one of my REIT investments when I purchased it in January this year when Singapore REIT prices took a pounding. It has since returned over 17.7% (including dividends). But, regardless of how positive returns are at the moment, you can be sure that I and the rest of us here at The Fifth Person are keeping a watchful eye on our investments and the prevailing economic climate.

So with the recent news that Singapore’s mall vacancies are at their highest level in a decade, I attended Starhill Global REIT’s recent FY2016 AGM to find out more about how its management planned to navigate the increasingly tough retail conditions.

Here are 15 things I learned from Starhill Global’s FY2016 AGM:

• At first glance, Starhill’s FY2016 results look like they took a tumble. Revenue, net property income (NPI), and distribution per unit (DPU) are all down 25-30%. However, the reason for the drop is because Starhill moved the end of its fiscal year to June. Which means FY2015 figures are calculated over 18 months while FY2016 figures are over 12 months. So if you compare FY2016 with the previous 12-month period, Starhill actually performed better: Gross revenue increased 11.4% to $219.7 million, NPI increased 6.9% to $170.3 million, and DPU increased to 1.4% to 5.18 cents. Starhill’s current yield (TTM) is 6.4%.
• Growth in revenue and NPI was mainly driven by Myer Centre Adelaide which Starhill acquired for A$288 million in 2015. Starhill’s Australia portfolio revenue and NPI grew 120% and 89% respectively. In comparison, Starhill’s Singapore portfolio remained flat with revenue and NPI inching up 1% and 0.6% respectively. Overall, Singapore still contributes the bulk of revenue at 62.6%. Australia and Malaysia contribute 19.5% and 14.6% respectively.
• Starhill Global REIT was one of the first few to venture into Australia in 2010. CEO Ho Sing explained that Australia’s retail scene is “quite strange”. Major retail brands like Uniqlo, Zara, and H&M only entered Australia in 2013-2014 with many major brands yet to enter the country. He believes that this along with changing consumer behavior presents an upside for the retail market in Australia.
• Starhill Global REIT divested its property in Japan, Roppongi Terzo, for ¥2.5 billion.The management also plans to divest the rest of its Japanese properties eventually. The CEO said that Tokyo Olympics in 2020 might drive valuations up and the management will look for divestment opportunities leading up to the Olympics.
• Portfolio valuation grew 0.7% to $3.14 billion. This was mainly due to revaluation gains in the REIT’s Singaporean and Australian properties which were offset by the Roppongi Terzo divestment in Japan and portfolio devaluations in China and Malaysia (due to forex loss).
• Overall occupancy rate is 95.1%. CEO Ho Sing also highlighted the fact that Starhill’s occupancy rates have remained largely resilient even during recessions. During the financial crisis of 2008, Starhill’s Singapore portfolio retail occupancy rate was 98.3%, while its office occupancy rate was 92.4%. Moving forward, there is no new retail or office supply in Singapore’s Orchard Road area from 2016 to 2018.
• Starhill Global REIT’s gearing is at 35% and average cost of debt is 3.09%. Weighted debt to maturity is 3.1 year with a large portion of debt (35% of total debt; $400 million) due to mature in FY2017/2018. 100% of Starhill’s debt is fixed/hedged via a combination of fixed rate debt, interest rate swaps, and interest rate caps.
• A unitholder asked why the REIT’s Malaysia revenue was falling. Chairman Tan Sri Dato (Dr) Francis Yeoh explained that it was due to the weakening ringgit. Lot 10 in Kuala Lumpur is on a master lease with built-in rental reversions for the next three years and that the mall is, in fact, doing well. Lot 10 is located at the prime Bintang Walk area which the Malaysia government has earmarked as a key shopping destination for locals and tourists. The government is also building an MRT station in Bintang Walk which will open right in front of Lot 10 and bring 100 million people in ridership annually. While currency deprecation is a problem, the chairman said “we can’t play God’s role” and control which way foreign exchange rates will go. However, the quality of the asset will endure and revenues will increase.
• Another unitholder asked about the management’s strategy for Starhill Gallery in Kuala Lumpur. The chairman replied that Starhill Gallery is a large luxury mall with over 300,000 square feet of retail space. However, there are not enough good luxury brands to fill the mall entirely, thus the management is looking to bring in restaurants and other brands like Apple to attract more blended shopper traffic. On the plus side, the management has convinced Louis Vuitton to build a global store in Starhill Gallery; the only other cities to have a Louis Vuitton global store are Paris, Shanghai, and Tokyo. Major property developments are also being built opposite Starhill Gallery including the headquarters of YTL Corporations (Starhill Global REIT’s sponsor). The chairman admitted that the property is “not (doing) as good as we want it to be” but it will get better.
• A unitholder questioned the management about Starhill’s falling revenues in China. The chairman explained that the Chinese market is extremely competitive. In Chengdu (where Starhill’s Renhe Spring Zongbei property is located), 100 million square feet of new malls were built after Starhill acquired its property. The chairman joked, “When the Chinese build, they build massively and (properties) spring up like mushrooms, and our prime property becomes ‘not-so-prime’ anymore.” He also said that another trend that is hurting sales is the clampdown on corruption and gift-buying. Businessmen in China used to buy gifts as a way of doing business in the past but it is looked upon as corruption now. The good news is that the management has managed to secure one of the largest furniture retailers in China, Markor International Home Furnishings, as an anchor tenant for Renhe Spring Zongbei which will generate more stable revenues. The chairman revealed that he doesn’t think the retail situation in Chengdu will improve and the REIT will look to divest its Chinese property at the right time.
• A unitholder asked where Starhill Global REIT was planning to acquire its next properties. The chairman replied that the REIT will focus on Singapore, Malaysia, and Australia as these are the three markets they know very well. Starhill was ahead in Australia and the management predicted correctly that retail closing hours would extend later (from 5 p.m. to 7 p.m.) due to the growing Asian population and their shopping habits. For Singapore and Kuala Lumpur, the high-speed rail will be good for Starhill’s properties in both cities.
• A unitholder asked what the management planned to do to attract shoppers to its malls. CEO Ho Sing replied that the management is working with relevant agencies like the Orchard Road Business Association to promote events in Orchard Road. He gave examples like the Japan Matsuri Summer Festival where Orchard Road was closed to traffic, the annual Christmas light-up, and the F1 race. The CEO also mentioned the Great Singapore Sale though he said the concept has gotten tired over the years. The chairman then reassured unitholders that the management is aware of the changing spending patterns of customers and online shopping, and doing all it can to attract shoppers. The retail experience has to be crafted better now and be compelling enough to attract people to physically visit a mall, and it is in the interests of the REIT to enhance the sales of its retailers so they can pay higher rents.
• In his presentation, the CEO highlighted that Starhill Global REIT doesn’t own the space occupied by Isetan in Wisma Atria; it belongs to Isetan. The space was closed for renovations for a year which affected shopper traffic in the mall. It has since progressively opened and Isetan also launched Japan Food Town which has improved shopper traffic. During the Q&A, the chairman revealed that he was trying to persuade the Isetan president to launch an All-Japan concept in Wisma Atria that received positive response from shoppers when it was launched in Lot 10, Kuala Lumpur. He mentioned things like Honda robots and ikebana classes that attracted shoppers in Malaysia and he brought this back to his point about creating unique and compelling retail experiences for shoppers. If this concept was executed in Singapore, it would complement the mall and be very good for Wisma Atria without the REIT having to spend any money.
• A unitholder asked if the management was considering an investment in Jurong due to the Singapore-Kuala Lumpur high-speed rail (HSR). The chairman joked that the HSR was his idea but he doesn’t know if the government will pay him a royalty for it! He then digressed and said that Kuala Lumpur, long-term, is a good market where property prices are still attractive. If Malaysia can get its politics rights, Kuala Lumpur would be a compelling city to invest in. He said condominium prices in Kuala Lumpur are, prime-to-prime, 600% cheaper compared to Singapore. But the level of architects is the same and the building materials come from Malaysia anyway! With the HSR, the chairman views that KL prices will converge toward Singapore’s in time like how prices in London and Paris converged with the London-Paris line. The unitholder keenly asked the chairman if he would invest in Kuala Lumpur then. The chairman said yes but currency depreciation is a concern and the management has to take a long-term view of whether a property will be yield-accretive over 5-10 years after taking that into account.
• Finally, a unitholder then asked the chairman what his views were on the Singapore property market moving forward. The chairman replied that he has been through many property cycles as a property developer himself but that this particular cycle was ‘broken’. The Singapore government had to control property speculation and inflation here like in China. The worry for the government at the time was that average Singaporeans were complaining that they couldn’t afford a home. Due to the printing of money by foreign governments, foreign buyers with an influx of cash speculated on private properties driving their prices up — which, in turn, pulled HDB prices up. The government had to introduce cooling measures to cut the speculation because, even though they welcome foreign investment, they didn’t want Singaporeans to suffer from sky-high property prices. However, the chairman thinks that the government has overdone the cooling measures and the market is almost dead for foreign buyers. He shared that a lot of property developers are in trouble and face heavy penalties of $30-40 million if they can’t sell their developments on time. But they have no market to sell to. He views that the government should readjust its policies to encourage more economic activity and he is optimistic that the government is watchful and that they won’t fall asleep on this. The chairman revealed that the high-end property market is the worse he has ever seen in the last few years and feels that it can’t get any worse. If it does, there will be collateral problems with banks and loans which he believes the government will take into account and not allow to happen. Lastly, he advised everyone to be patient and that the change won’t be immediate, but it is his personal view that it will become better than what it is today.