Since Feb 2017, i added Ascendas India Trust in my stock portfolio with a significant weight-age and bought most of this REIT at an average price of $1.01 per share. Today, it constitutes a 40% of my own stock portfolio and I am sitting on at least 28% or more profit margin on paper.
Not only that, I took part of my two kids’ annual savings to invest in this REIT at the right time for them. Of course, all of us are enjoying to receive quarterly dividends from this REIT without fail. We are all the shareholders of this REIT business to own a part of their industrial property leasing businesses in India.
Here Are The 3 Reasons
- Proven Track Records of Distribution Per Unit (DPU)
DPU recorded a historical high at 8.1 cents in FY19 and it has been steadily increased from its low back in FY14. Below is the list of DPU results for the past few years.
Both Revenue, Net Property Income are always in increasing trend since FY08. My confidence in this REIT is growing year after year. The properties owned under this REIT has high occupancy rate despite of a growing floor space. This makes me think that it is on the right track to achieve long term growth.
2. Diversification of Stock Portfolio – Not China and USA.
While it may be safer to invest in mature and large markets like in USA or China. That was what many retail investors could have thought few years ago prior the start of trade war. But I had decided to take a plunge to own Ascendas India Trust. It only owns India Industrial Properties in 5 India cities namely Pune, Mumbai, Bangalore, Hyderabad and Chennai.
3. Singapore Management With Good Governance Framework
In fact, Ascendas Property Fund Trustee Pte Ltd manages Ascendas India Trust. All are also under the care by local property giant, Capitaland. This gives me confidence in terms of corporate governance under Singapore management. Indeed, this REIT does not disappoint me so far. Securities Investor Association (Singapore) awarded the Investors’ Choice Awards 2018 Winner, “Most Transparent Company Award” to it. It also received another award from The Edge Billion Dollar Club 2018 Winner of “Most Profitable Company” Award (REIT Category) .
Note that its distributions to shareholders are generated in India Rupee (INR) but paid to shareholders in SGD. Hence, if INR depreciates, it will impact its DPU growth as well as its Net Asset Value. This will be my major concern for this REIT.
As far as this REIT is concerned, I am holding Ascendas India Trust for a long term dividend play. My kids are earning decent dividends with this REIT. There is not much reason why we should let it go. However, there are 2 conditions which may prompted me to sell it off. One condition is based on profit taking when it reaches at my target 50% level. The other condition to trigger my sell off is when the depreciation of INR causes an significant erosion of the profits made by this REIT.
Do your own due diligence check before investing any stock.