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I attended the webinar sponsored by COL Financial this afternoon and it was great to hear updates regarding AREIT straight from the CEO, Carol Mills. Fortunately, COL shared it on Youtube:

The highlight, of course, is AREIT’s planned asset infusions for next year. This includes a solar farm in Zambales; Seda hotels in Cebu and Palawan; the Holiday Inn in Makati; office building Ayala Triangle Gardens T2; and shopping malls Greenbelt 3 and 5. This is by far the most diverse set to be infused in a single year and pretty much includes all 4 traditional properties: office, retail, hotel and industrial.

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AREIT’s next asset infusion is a 276 hectare land in Zambales which will be leased to an ACEN Inc. solar farm subsidiary. With this move, AREIT is positioning itself to be a truly large and diversified REIT with properties that include offices, hotels, malls, factories and now, a solar farm. As a long term investor in AREIT, I am confident that their diverse collection of income generating properties will translate to a stable and increasing stream of quarterly dividends. To note, their latest 3Q2023 dividend of P0.55 is nearly double the initial P0.28 dividend given last 2020. For income focused investors, this is is gold standard. It is even more impressive given the challenges brought on by the pandemic and it shows that high quality real estate coupled with good management will always be a winner.

Investing early is a crucial step in achieving financial security and building wealth over time. The earlier an individual starts to invest, the more time they have to let compound interest work in their favor. By starting to invest early, individuals can take advantage of the power of compounding, which is the ability of an investment to generate returns not only on the initial principal, but also on the accumulated interest.

Investing early also allows individuals to take on more risk. When an individual is young, they have more time to recover from market downturns and recoup any losses. As they get closer to retirement, it becomes increasingly important to shift towards more conservative investments to protect their savings. By starting early, individuals can afford to take on more risk and potentially earn higher returns.

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DDMPR is quite an unusual REIT. Firstly, its buildings are all located in one site.

Secondly, it is a slow growing REIT. There have been no announcements on additional asset infusions – and they listed way back in 2021. Also, this REIT decided to own a property which was not fully developed at that time. In fact the last building in the complex, the Ascott serviced residences, was only topped off this month. Although the MoA / Aseana bay area is shaping up as a proper business district, it is not yet as established as Makati, BGC or Ortigas.

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Investors may be looking at mutual funds or UITFs but are they worth it? Let us talk about fees. 1% may seem like a small number but many probably don’t realize its full impact. Firstly, that is 1% of the NAV deducted every year. Relative to the dividend income, the percentage is much higher.

Let’s say I bought 100,000 units for P1 each for a total of P100,000. That investment has a dividend yield of 5% so I received P5000 in dividends for the first year. However I also paid the 1% fee or P1000. The P1000 fee that I paid is 20% of the P5000 dividend that I received! Am I willing to pay one-fifth of my income to the fund managers? Am I getting value for what I paid?

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