Christmas Lighting at Orchard Road

Orchard Road is always known for its Christmas lighting and decorations. I spend almost whole day there during Christmas Eve. The crowd....hmm I should say was much lesser compare to last year.

HO HO HO
Merry Christmas!

The year end resolution- The Mainstream Phenomenon

The meaning of 'Mainstream' - the ideas, the attitudes or activities that are shared by most people and regard as normal or conventional. 

The social mainstream tend to follow a rigid concept or system that govern the majority of mankind.  But there are some who just simply doesn't seem fit in with the conventional path set by the social demands. These are the ones who tend to walk the most unconventional roads and found some of the most uncommon results. 

Classic example like Christoper Columbus who discovered the continent of America between 1492 - 1502. People of that Era did not believe that it was possible to reach Asia through Atlantic ocean, it was one of the common mainstream mindset, but Columbus did not follow that concept and went on voyages to prove his theory. Although he did not reach Asia, he did discover America and proved to the people of the Era that the world isn't that small as they thought. 

 

Ever come across people who tend to give advice based on 'mainstream' flow rather than from actual real experience. There are some who do not really know what they are talking about, for much of the time it was based on the 'mainstream' ideas flowing around. For most of it, the motive of intention is good but it may just not fit well with some people. Some of common example of social mainstream like 'Study hard, get a qualification', 'Get a job, work hard' or 'Get marry, have children'. I basically lost count on how many times people been telling around me. 'Go study a degree, get a better job!'

'Study a degree, so whats next?'

Response: 'Find a better job'

 'No relevant experience, how?'

Response:'Go get the relevant experience!'

'Don't even want to hire me, how to get relevant experience?'

A long pause and then response:'Can start from junior position, get the experience first.'

'Back to square one? Suffer pay-cut? Got family and kids to feed. How?

Stop. Walk away.

Lol. Actually it went much further than that, but you get the ideas ah?

As i had mentioned in 'My Journey', when I was in Air Force. There was a huge crowd following the mainstream phenomenon of studying part-time degree such as Business Management to upgrade themselves. They managed to complete it and obtain a higher qualification, but some of them ended up going nowhere. Turns out that they had in fact studied an 'irrelevant field'. Most of bosses were reluctant to hire a 'green' manager with no management background. One of my friends had to study another relevant degree in the 'Engineering' field in order to get further advancement in the existing industry. 

Generally, most of the advice given were out of good intention. They are not entirely wrong in following the mainstream but the world is far more complicated than just purely following the flow. 

For fresh graduates, they can afford to start new with no family commitments. But for most of us in middle 40s or even 50s, it is a tricky situation. Especially ones is already holding a middle rank within their industry with a pay-check that had grew after years of service. Tied down by family commitment and housing loans, starting over in a new industry would meant suffering pay cut or loss of value. So rather than following the 'mainstream' it would make more sense to analyses it whether how it would fit in with our situation.

So, 'Study a degree, get better recognition within our current chosen field' would be more fitting with the Gen X group. After all, we are now in our middle age, we cannot afford to waste any more time and resources. Better know what we are doing before committing.

Ahem! For those who purely study for knowledge or passion, consider yourself lucky! 

Why? 

Well..... that brings out some of my memories. Bad memories......

The Price of following the 'Mainstream'

In 1994, during the time when I was pursuing my Diploma in Mechanical Engineering. It was one of the many tutorial lessons on the subject of Engineering Math. Suddenly, the lecturer injected a class test. When the class test ended, everybody left except me. I was alone still sitting in the class staring at the paper on my desk. The lecturer was a lady in her 50s, she walked over and inquired. She was shocked to see a blank sheet of paper. I had written nothing for the past 30 min. I told her truthfully, I totally had no idea how to do it. Obviously, she thought I was trying to be funny. She went through the test scripts with me and realized I wasn't lying. I really had no idea how to do. All the past lessons in the class, I had been struggling to understand the subject but it was in vain. I was unable comprehend anything at all. She looked at me with a sad face and said one word which I remembered it for the rest of my life. "You shouldn't be here'. 

Many years later, I finally realized what she meant. I had followed the mainstream and ended up studying something which I totally cannot handle at all. Those days, people just followed the mainstream, study hard, get into the polytechnic, doesn't matter what you study. The price I paid was 3 years of nightmares in Polytechnic. The reasons were simple, I did not manage to discover where my strength (History and Arts) was and ended up in a field which I can never be good at. 

Although I eventually managed to graduate from Polytechnic. It was obtained not with my capabilities, but rather through sheer amount of vain efforts and determination put in place by my lecturers who tried to help me through it. I had done 3 times more tutorials than any students, I sit face to face in the lecturers' room, a one to one personal coaching in early morning and late evening while my classmates spend their time shopping or playing soccer. And the final examination results which came out was. I failed. Yes, I failed the final examination. 3 times in 3 different modules. I simply cannot make it. But yet, they helped me through by giving me a 'satisfaction 'pass, which was in truth a 'sympathy' pass as an recognition of  my titanic efforts. 

It was not something I wanted to remember but nevertheless it was a part of my past as a firm reminder of the price of following the 'Mainstream' without knowing what I was really doing. I was plain lucky, really lucky to meet 2 kind heart lecturers who helped me. 

The Aftermath

I guess I changed much after that. The trauma however remains. There were nights when I woke up with dreams about looming examinations with all those Engineering Math formula floating around my eyes. Scary isn't it? 

Thereafter was I got myself trapped in engineering jobs which were all totally unsuitable to my character and I could never be good at. But still, I made the best out of the worse and eventually discovered that the path to the freedom I so desired is to achieve financial independence. The path which would one day free me and allow me to pursue my passions. 

Well, that was long isn't it. 

For all those still searching for an answer. Best of luck and may Fate smile upon us all. 

Merry Christmas! 

IREIT Global venturing into Spain

Many things are happening for this month. Following up with the merging between Fraser Commercial Trust and Fraser Logistics and Industrial Trust, and Mapletree expanding into Japan. Another company IREIT Global announced their plans to acquire assets in the country of Spain.

 

Business Time News  

 

Now that really came as a surprise to me. IREIT Global portfolio currently consists of properties located only in Germany, although it make sense to diversify portfolio to reduce concentration risk, but why choose Spain? The country of Spain never strikes me as an economic powerhouse in Europe. As I have quite an amount of investment in IREIT Global, I decided to look deeper into this country sitting at the edge of Western Europe.

 

Spain it appeared is slowly recovering from their economic crisis which occurred between the years of 2008 - 2014. Spain has managed to gain a GDP annual growth of 2.5% in year 2018. This make Spain the fifth largest economy in Europe. But that doesn't really explain the rational basis behind the decision to invest in Spain. I took a closer look at the region IREIT Global is moving into. IREIT Global is acquiring 4 assets in two cities namely Barcelona and Madrid.

 

Barcelona is the capital of Catalonia and the second largest city in Spain. It has the second most populous municipality in Spain with a population of 1.6 million. Madrid is the capital and most populous city of Spain. It is the administrative and financial capital of Spain. Well, that does speak for the potential concentrated volume of spending power within a city. 

 

Looking at the assets they are acquiring, 2 assets are located in each city. All 4 are Freehold assets. Based on the chart above, the assets located in the capital city of Madrid look promising with more than 90% occupancy rate and had just done refurnishing in year 2015. While the assets located in Barcelona look less tasty with a low occupancy rate of less than 80%, IL-Lumina is just a little more than half of occupancy at 69%. No refurnishing had been done for these two assets, I could see some possibility of upgrading works for it. This would prove a challenging task ahead for the management of IRET Global to transform these two assets in Barcelona. 

Moving ahead, for long-term perspective. This might took quite a while to see results. If Spain economy continued to grow, IREIT Global could bring the more under-rented assets to market levels and increasing occupancy rate, these could add more values and sustainability to IREIT Global portfolio. Generally, I am more caution with oversea investment. The market price of IREIT Global has grow to a higher price of $0.80, it is unlikely I would allocate anymore investment into this counter in future unless Mr Market offered a window of opportunity.

 

 

 

Mapletree NAC expanding into Japan

In my November posting, I blog about the civil unrest in Hong Kong has damaged one of the malls 'Festival Walk' owned by Mapletree NAC. The management was force to temporary close the mall. Business was resumed on 26 November. Following with it, Mapletree NAC announced the decision to propose acquisition of two office properties in Greater Tokyo on 4 December. This is in line with the effort to diversify their portfolio to avoid concentration risk in one asset.

Business Time News

As this announcement came almost after the incident in Hong Kong, it could be a trigger point, that prompt the management to move into action. Well, I had expected some action to be taken, but I certainly didn't expect them to move that fast. Taking a look at the proposed assets in Japan:

Looks just like any other office buildings, isn't it. But wait, lets take a look in details.

It is located within the Tokyo prefectures with nearby facilities. An interesting fact is that it is a Freehold property. This does hold a bit more values than a lease-basis property. Japan has one of the highest concentration of population density within the cities. This contributed to a shift of a mass of people living close or within the city itself, and Tokyo itself is a economic, financial and political center of Japan. In the past, I have profited from other Japan assets such as Saizen Reit and Croesus Retail Trust, as such I could see this as a possible valuable assets to hold for long term.

Overall, I like the fact that the management has taken actions to reduce their concentration risks, one of the factors I usually looked into for an investment is a pro-active management that do something to improve the situation. As the old saying:

'Action speaks more than a thousand words'

Merger of Fraser Reits

Following the announcement of the merger of portfolio between A-HTrust and Ascott Reit in October. Another merger was announced between Fraser Commercial Trust and Fraser Logistic and Industrial Trust. This signify another consolidation for this year.

Fraser Commercial Trust has seen much changes in recent years, making upgrades to China Square Central and Alexandra Technopark in Singapore. The moving out of a long term major tenant Hewlett Packard Singapore from Alexandra Technopark has been a huge impact. Although the management has been able to maintain consistent DPU, the challenges remain for such high concentration of portfolio in Singapore market. After the announcement of the merger, the price shot up and eventually closed at $1.68 on Friday.

Unlike Fraser Commercial Trust, Fraser Logistic and Industrial Trust currently do not own any property in Singapore. It has a diversify of portfolio in Australia and Europe (Germany and England). The merger would gives Fraser Logistic and Industrial Trust some exposure to Singapore market. This merge would turn this Reit into Singapore 9th biggest Reit. 

More details can be known here Strait Times News. 

I have some holdings for both Reits. Most of it was acquired during the small oil crisis in 2015-2016. This merge would combined my holdings in both Reits into one. Well, that gives me one less counter to monitor. 

So what is going to happen to us as unit-holder?

Fraser Logistic and Industrial Trust will be buying over the entire portfolio of Fraser Commercial Reit at a sum of 1.54 billion. For Fraser commercial unit-holder, we would be getting as below: 

 

This means for each Fraser Commercial Trust share, we would be getting a cash of S$0.151, in addition we would allocated 1.233 new FLT share. 

Example: If ones owned 10,000 shares in FCOT, he would be getting 10,000 x S$0.151=  S$1,510 cash and allocated 12,330 new FLT units.

This whole process would take an estimated 3-4 months to complete. So. We wait. :)

Monthly Financial Updates

This monthly sustainability report does not include any of the salaried income. The basis for this monthly financial review is to gauge the sustainability of the status of my financial independence based on the total amount of passive income received.

 

The month of November was a harvest month for dividend collection. Total dividend collected for the period between January-November amounted to $28,038.96. Rental income remained stable.

 

Wellness expenses continued to remain high due to long term commitment to control reoccurring illness. High healthcare expenses in Singapore are one of the most challenging factors to tackle here.

No trading was done for this month. Portfolio remained unchanged.