RE:RE:RE:RE:couple thoughts on Cdn REITsHey CSC
Definitely long time, no hear. Good to hear all is going so well for you. All is top-shelf here as well.
Congrats once again on doing so well on the investing front. That is sure going to be one BIG estate tax bill. I sure hate to see so much hard earned money going to wasteful governments.
I've certainly changed my view on REITs going forward.We've done quite well with them in the past but as mentioned, the biggest factor was the take-overs and nicely timed GRT sell.
I really like the income but the biggest negative to me is the divy cuts. We've had cuts with D, AX, HR, and fortunately had sold REI (because of our negativity on retail) before they cut. I'm sure these been a number of others as well that we've never owned.
We are now down to just DIR and NWH and I think there is a decent change both will cut their divy. Neither of them has increased their divy for yonks (if ever).
All our other holdings generally increase their divy each year (other than KEY which has taken a break but will probably re-start once KAPS is up and going). I've decided I like companies with a yield over 3% that increase most years.
I did look into Skyline when you mentioned them but it's outside the scope of our invesitng strategy. I want to stick to regular TSX listed dividend income/growth stocks..
Take care
Sarge
CanSiamCyp wrote: Hey Sarge!
Long time since we have communicated ... hope all is going well with you and your wife! We are keeping well here!
I understand your comment re transitioning into blue chip dividend growers cuz there have been a lot of opportunities to buy-in recently at 52-week low prices. There may even be lower prices on the horizon ... if Putin launches a nuke as a last desperate move .... or some such crisis! Hopefully not though (the nuke part, I mean)!
Re DIR.un: I am surprised to note your negativity. As far as our holding of DIR.un is concerned, we are up 14% on purchase cost and an ever growing % gain on ACB (which keeps growing cuz of the annual 6+% yield of largely Return of Capital ... which is a major strategic decision on my part cuz of holding REITs primarily in non-registered).
Re REITs in general: our $1.6 M portfolio of (currently) 13 entities stands at 1.75% gain cf. purchase cost, 15.01% gain cf. ACB (see remarks above re ACB and RoC), and yields a cash flow at 6.96% of current market value. What's not to like about that?
In years past, we had capital gains generated by acquisitions of AAR.un, RUF.un, ACR.un and MST.un ... all with significant CGs. I can't be bothered digging back to total those gains.
The only ... repeat only .... loser I have encountered in the REIT sector was our holding of HOT.un. It was liquidated for a huge capital loss (in a non-reg acct so useful to offset CGs on other entities). I don't consider that a bad track record for REITs. As one seasoned investor stated .... "if you say that you have never had a loser, then you haven't been investing!'.
At present our portfolio is running about $9.9 M (yes, there has been a pullback this year due to market conditions) and generating an annualized cash flow > $600 k. Portfolio composition is approx. 20% dividend paying commons, 15% REITs, 30% preferred shares, 30% Skyline private equity, and 5% cash. Taxable unrealized capital gains currently running about $600 k ... so the government will get some nice tax revenue after we kick the bucket!
Re Skyline: I have mentioned this to you in our previous communications. We are invested in 4 of their funds .... Skyline Apartment, Industrial and Retail REITs and the Clean Energy Fund. I have been delighted with the performance of all ... but the Industrial REIT has been exceptional in the past year. Essentially, REIT management decided to recycle their properties ... selling (at premium prices) their older warehouse properties and recycling funds into new build, custom designed, high clearance warehouse facilities. As a result, huge capital gains were surfaced. So from mid 2021 to mid 2022, our $400 k holding of Skyline Industrial increased to $560k based on increased unit valuation, and also generated monthly distributions at 5+% (based on the original unit value) over that same time period.
Cheers!