UOE Commercial REIT(TS0U.SI) – Why I Bought This Stock

A few years after I started working, my mother started talking to me about investing my savings. I read about how Warren Buffet learned to invest, I read online investment blogs and I opened a trading account with UOB Kay Hian. I bought a bond … and I totally forgot about it until the bond matured.

Yeah, I am the type of “investor” who buy a stock and then forget all about it. I only remember about it when my mother asks me about it. I will take a look at the stock price and promotly forget about it again. It is an understatement to say that I am not motivated. 

All that changed when I watched a video by a Taiwanese channel on YouTube called The Storm Media. There is this playlist called “Moonlight Economy” where they interviewed seasoned Taiwanese stock investors. There was one guy who retired at 40 years old because the dividends that he’s earning is more than his daytime job pay. These interviews made me believe that it is really possible to retire by 40 by investing in stocks. These “seasoned investors” showed how they go about choosing stocks. 

This got me interested in stock investing once again. One of these guys talked about property investing, which is what we know as Real Estate Investment Trust (REITs). I went online to learn more abjout REITs and this sentence is what got me interested:

“REITs are required to distribute at least 90 percent of taxable income annually to shareholders as taxable dividends. In other word, a REIT cannot retain its earnings”.

That sounds like a money-making machine to me. So I went online and found this REITs page that lists out all the REITs available on the SGX. A few REITs caught my attention, one of which is OUE Commercial REIT so I went online to do a little research.

My Reasons for Buying OUE Commercial REITs shares: 

Quality Properties 

When you buy a REIT stock, you are esssntially buying properties, so the quality of the properties must be good in order to generate income for you. 

OUE Commercial REIT Singapore

OUE Commerical REIT Shanghai

OUE Commercial REITs portfolio consists of four commercial properties: OUE Bayfront, One Raffles Place, OUE Downtown and 91.2 strata interest in Lippo Plaza, a Grade A commercial building in Huangpu district in Puxi, Shanghai. 

Sound Financials 

OUE Commercial REIT Financial

As you can see from the chart above, OUE Commercial REITS has stable cashflow.

Stable Occupancy Rate

When you talk about REITs, which stands for Real Estate Investment Trust, you are actually investing in a cluster of properties. In this case, you are investing in commercial properties. It’s no use having beautiful buildings if no one rents the place. Hence, the occupancy rate is very important. That is where the money comes from.  

OUE Commercial REIT Occupancy

As you can see from the chart above, OUE Commercial REITs’ occupancy rate has been consistently been over 90%, achieving higher-than-market occupancy rate. 

Warren Buffet says, “Be fearful when others are greedy and greedy when others are fearful.” 

OUE Commercial REIT

The steep drop in stock price is due to the acquisition of OUE Downtown. ProButterfly questions why OUE C-REIT is acquiring an asset when other REITs are selling as the commercial office sector in Singapore has been on a rally.

I know that I am probably very amateurish in my analysis and investment. Please let me know what you think of my analysis and OUE Commercial REIT stock in the comments below. 

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5 months ago