United Hamsphire US Reit (UH Reit)
I started buying last year and added more recently.
My thinking is UH Reit holds mostly properties anchored by neccessities/supermarket. These tenants have long lease duration. Hence, its rental income is stable.
The downside is rising US interest rates. And the annual rental increase is likely small.
Its 2023 DPU should be lower, due to rising interest rate. This is likely priced in its current price. If interest rate continues to rise, its DPU will continue to fall. If Fed cut interest rate, its DPU should rise.
Keppel Pacific Oak US Reit (KORE)
It's an US office reit. As many know, US office reits are in trouble due to falling physical occupany, falling demand, higher interest rates and tighter lending requirements for CRE (Commercial Real Estate). People expects more trouble for office landlords down the road i.e. slow moving train wreck.
The upside is that the above issues are likely priced in at its current price. If things are not going to get worse than expected, the current price is pretty ok to me.
The downside is that things can get worse than expected.
I will keep my position at KORE small, so that if prices fall further without permanant issues, I can add more. If there are permanent issues with KORE later, the losses will be kept small due to small position size.
So far, KORE office properties have held up better compared to MUST and Prime US Reit.
Cromwell European Reit
Have not bought into it.
Similar to US reits, it is facing rising interest rates. Unlike US Fed whose rate tightening is likely ending, the ECB interest rate is expected to keep rising given high Euro inflation and its interest rate is not as restrictive as US's.
We see how rising interest rates affect US reits last year. I expect that rising Euro interest rates will affect Cromwell similarly.
Cromwell should be interesting to look at, when ECB rate tightening cycle is ending.
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