Monday, October 26, 2015

Saizen Reit - A surprise rise in stock price?

Saizen reit has been an investment which I've talked about for the past 2 years plus. I personally made my investment in this reit 2 years back. Much has been said about how this reit is trading at a discount and they have been able to sell some of their properties at above valuation which means the reit could be worth even more than what they valued their properties at. The net asset value could have been higher than what they had reported.

For the past 2 years, the stock price of Saizen reit has remained mostly stable with slight declines. Just last week, its price went up suddenly which made a lot of investor curious. It rose 8.2% on Friday alone. What caused the stock price to rise so much?

Saizen reit released a statement thereafter saying that they had actually received a firm's offer in relation to the assets of Saizen Reit. This simply means there's a possibility of an acquisition from another firm which caused the unit price to rise.

Here's the announcement:
"the  Manager  wishes  to  announce  that  the  Manager  has  received  a  firm  offer in  relation  to  the assets  of  Saizen  REIT  which  the  Evaluation  Committee  and  the  joint financial  advisers  are currently  reviewing  and  evaluating.  No  definitive  agreements  have been  entered  into  and  there is  no  assurance  that  the  offer  will  be  accepted  and  that  definitive agreements  will  be  entered into."  

However, it is still speculative at this stage on whether the acquisition will go through. With Saizen reit's net asset valued at  $1.14 currently, any potential buyout may be higher than its current stock price below $1 thus the stock price rose from 80 cents plus to 93 cents on Friday.

Saizen Reit has a portfolio of income producing real estates. These properties are mostly residential properties. It is hard to find an investment in residential properties which was what attracted me to invest in Saizen reit in the beginning. The company is certainly trading at a discount plus residential properties are stable income producing assets especially in Japan where the majority of the population rent their homes.

Saizen Reit is my biggest investment to date as I've added my positions over the years at lower prices. I've collected dividends over the years while waiting for the Reit to unlock its true value. Whether there's an acquisition or not, this has still been a good investment till today.

Let's see what happens next.

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Related Posts:
1. The Japan story - Croesus retail trust and Saizen Reit
2. Saizen REIT - Income from Japanese residential properties?

Wednesday, October 21, 2015

The Real Purpose Of Financial Freedom

Financial freedom is a word that's widely used and maybe misused. Some of us may think financial freedom is all about money. Why do we invest? Why do we want to save so much? Why do we want to keep having more money? It seems like those who pursue financial freedom is always focused on money. Isn't it bad for life? Shouldn't we just enjoy life and not think too much about money?

What is Money? Why Financial Freedom?

Before we can answer the question of the real purpose of financial freedom, we have to understand what exactly is money? Money in short is actually just a medium of exchange. We need it to buy goods and services. In layman terms, we need it to live our lives and to provide for our families.

As kids, we have lots of dreams and most of it has nothing to do about money. When a kid says he wants to be a doctor, its not about the salary he will receive. Its always about the people he can help and the lives he can save. A kid doesn't have to worry about money because money is taken care of by his parents. He can really do the things he like and pursue his dreams.


When money comes into our lives, when we have the responsibility to earn it for our own survival or the responsibility to provide better lives for our families, somehow we get lost in the world and lose our dreams and passions in life. We ask ourselves what are we working for? What are we living our lives for?

We get unhappy and pursue all kinds of funny things in our life. Funny because some of us will regret later and think why did we even pursue useless stuff in our lives in the first place? There are a few motivations even to these two popular words called financial freedom. Financial freedom can also be pursued in a wrong way.

Financial Freedom To enjoy life?

One of the motivations to financial freedom i've heard is that one can enjoy life once he reach financial freedom. He can travel around the world, buy the things he likes and really live the life he desires. More often than not, financial freedom is linked to a luxurious life of property and cars. Financial freedom is often said to be the state where we don't have to work and still live the life we desire. Desire is the key word here.

Do we desire a life of luxuries? Do we desire a life where we can buy anything we want? However, the key question is so what if we have reached that stage when we can afford anything we want without working? Is that all to life?

Financial Freedom To do nothing?

The second motivation I've heard regarding financial freedom is that one can do nothing and have the freedom not to work when we reach financial freedom. If we hate working and don't like our bosses or colleagues, this seems like a good idea. However, to do nothing when we reach financial freedom is really just meaningless.

Many people hope that one day they don't have to work, don't have to wake up early or face the demands of their boss or the office politics. But, when that day finally comes when we don't have to work, it starts to feel that life is just too boring. We start to feel disconnected from the world, disconnected from people and lonely. This doesn't seem like a good financial freedom life.

Financial Freedom To spend time with our loved ones and pursue our passions

The last and most important motivation for financial freedom to me is that we can spend time with our loved ones and really pursue our passion. If we have kids, we can spend more time to nurture them to be better people. We can give more love to our family by spending time with them.

At this stage, we don't have to work for money anymore. We go to work because we really like our work and not because we have to work. When this happens, we become more motivated at work because we work for passion and not as a chore.

The most important reason for financial freedom is we can become like kids again, having dreams without worrying about the money aspect. We can fulfil our passions without having to think will this work that we do bring us enough money to provide for our family?  We can do meaningful things in our life.

If we get money out of our lives, we can do the more important things in life. That is the purpose of financial freedom. It is not for us to just enjoy life or do nothing but rather for us to lead a more meaningful life. Would you rather be a slave to money or a master of money? Slaves work for money while masters let money work for them. We can choose the path we take which leads to different destinations. altogether.

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Related Posts:
1. How Not To Be a Cheapskate In Your Journey To Financial Freedom
2. Save 75% of your income to retire in 7 years

Monday, October 12, 2015

Prepare To Pay Higher For Your Home Loans If You Do Nothing

Two days ago, there was an article on Channel News Asia that reported: "Home owners should prepare for higher mortgage rates: Analysts". In the article, it reported that analysts have said home owners should brace themselves for further increases in mortgage rates. Singapore has one of the highest percentage of home owners which means most of us also have mortgage loans. It is impossible to buy a house without a mortgage loan nowadays.

How increase in mortgage rates affect home owners? 

Those of us who have mortgage loans from the bank would already have felt the increase in the monthly instalments we pay for our housing loans if we did not refinance it to a fixed rate package. Some of us have small increases below $100 per month while others who have larger mortgage loans have bigger increases of a few hundred dollars per month. This increase is not going to stop there.

I've been working as a mortgage consultant for the past 2 months and have seen mortgage rates rise significantly. I work closely with the banks in Singapore and am always updated on new rates changes. Many people have emailed me to refinance their housing loans to fixed rate packages so they have a greater piece of mind. This is a free service I provide to all readers of my blog as I feel it really helps people to save more money and get the best rates for their loans. You can read more about the service I provide here: Home Loans (New/Refinance). One of the greatest expense we have is certainly our monthly mortgage instalment which we have to pay for average 25-30 years. Just refinancing to save a few hundred dollars per month will go a long way.

The rise in SIBOR

If you've taken a home loan from a bank and have not done any refinancing for the past 3-5 years, you will definitely be on a variable rate package which means you will be affected by the rise in mortgage rates.

SIBOR is the most common variable rate package. Some may ask what exactly is SIBOR? In its original form, it is called Singapore Interbank Offer Rate. This is a rate which Singapore banks lend to each other. You may have heard of the London Interbank Offer rate (LIBOR) which is used in the UK.

One year ago I wrote an article on "Housing loans - What to choose and what happens to your loans when interest rates goes up?". I warned of a impending interest rate increase and how it will affect home owners. The SIBOR rate was only 0.40% at that time. Now SIBOR rate is at 1.13%. This is an increase of 3 times now in just one year. DBS expects the three-month Singapore Interbank Offered Rate to rise from the current 1.13 per cent to 1.22 per cent by the end of this year, and 1.75 per cent in about a year's time.

I've managed to plot the 3 month and 1 month SIBOR rates from 1987. The data is from MAS website. Unfortunately, MAS discontinued the data from 1 January 2014 so I can only plot one more single point for the current October 2015. From previous trends, when rates rise, it does not just stop there. There is a significant spike in the rates and I believe it will continue to rise too.

How much increase in our housing loan instalment if mortgage rates rise by 1%?

To cut the long story short, most of us will be affected if we still have mortgage loans on variable rate packages. How much will be the increase in our housing loan instalment if mortgage rates rise by 1%? This will be what most of us are interested to know. 

I've calculated the values based on a remaining loan tenure of 20 years and increase of rates by 1%. as seen on the table below:

Loan Amount ($)Monthly Increase
$300,000 $138
$1 Million$460
$1.5 Million$690
$2 Million$920
$3 Million$1,380

Do note that the increase is on a monthly basis. Fortunately, we can do something about our loans and limit the effect we have on rising mortgage rates.

How To Refinance to lower our monthly mortgage payments?

With mortgage rates increasing, it is time to look at refinancing our home loans so we get a piece of mind for it. Refinancing is simply changing your loan package to another loan package so you get savings on your mortgage instalments. 

I have seen banks revising up their rates over the past few months while doing mortgage consultancy work. I've also helped people lock in good rates for their mortgage loans through refinancing to fixed rate packages. I would not recommend anyone to take up or remain on floating/variable rate packages at the current moment. 

Refinancing is easy and I provide free consultancy service for your refinancing needs. Simply email me at and I'll settle your refinancing for you. I compare the rates of many different banks in Singapore to give you the best rates you can get for your home loans. Thereafter, I'll link up with the bank to provide personalised service for your refinancing. 

If you're planning to buy a property or have already bought your property and looking for home loans, I can assist you on applying for your new mortgage loans too. Feel free to take a look at the other complimentary services I provide here too: Home Loans (New/Refinance)

Its time to take some action and save some money in the process! Share this with your friends and family members who have mortgage loans too. 

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Monday, October 5, 2015

Croesus Retail Trust - Rights Issue 22 For 100

Croesus Retail Trust is a company which I invested in since November 2013. This is a business trust which owns shopping centres in Japan. It currently has 7 properties in its portfolio and is buying the 8th property in Kyushu island. This is the reason for the rights issue which was announced just a few days ago.

I will be subscribing to the rights issue and also will be applying for excess rights. This has been something which I've been waiting for quite some time now. The dividend income I've been getting from this stock has been quite stable for the past 2 years which I believe the management knows what they are doing.

I attended the retail investor seminar of CRT just a few months back which reaffirms my decision to invest in this stock. You can read more about what the management of CRT said during the seminar here: Investing in Japan's Shopping Centres - Croesus Retail Trust Retail Investor Seminar

Croesus Retail Trust Acquires Torius Property in Fukuoka Prefecture, Japan for JPY 7,997 million

Torius Property will be the eighth property in Croesus Retail Trust’s (“CRT”) portfolio, marking its first foray into Kyushu Island, and will be the fourth property acquired by CRT since its IPO in May 2013. The rights issue will be offered for Units of twenty-two (22) Rights Units for every one hundred (100) existing Units at S$0.610 per Rights Unit.

Torius Property is a large-scale suburban retail mall located in the satellite town of Hisayama-machi of Kasuya-gun, which is approximately 13 km from central Fukuoka City in Fukuoka Prefecture, on Japan’s Kyushu Island. It comprises of 36 single or double storey buildings and offers a diverse and unique mix of 145 tenants. Some of Torius Property’ tenants include Costco (wholesale supermarket), Nafco (interior and furniture, DIY), United Cinema (cinema), Rakuichi Rakuza
(amusement centre) and Daiso (100 yen shop). Other notable facilities at Torius Property include a petting zoo, as well as an outdoor barbecue park that enhances the mall's appeal as a family outing and gathering destination.

The current stock price for CRT is about S$0.815 per unit. Getting the rights units at S$0.610 will improve the yield I receive from this stock moving forward. Subscribing to the rights issue shows my trust in the management to provide good income for shareholders in the future.

The new property that they will be buying has good NPI yield of 7.84% as compared to the NPI yield of CRT's existing portfolio of 5.3%. Torius Property has a high occupancy rate of 95.3%.

The commencement of trading of rights entitlement will start on 9th October 2015 and end on 19th October 2015. The last date and time for acceptance of the Rights Entitlements and payment for Rights Units will be on 23rd October 2015.

Its time for more dividend income!

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Related Posts:
1. The Japan story - Croesus retail trust and Saizen Reit
2. Investing in Japan's Shopping Centres - Croesus Retail Trust Retail Investor Seminar