I have decided to publish my reply in response to a reader’s comment that AA REIT’s gearing level is at 51% as a blog.
This is because I have received similar comments in recent months.
Having my response published as a blog will make it easier for me to point readers who leave me similar comments in the future to a ready response.
My reply:
Hi patrol,
I don’t know which piece of research that is but AA REIT’s latest published gearing level dated 27 April was 37.5%.
If you are referring to the perpetuals which AA REIT has on the balance sheet, there was a discussion in the comments section here in ASSI a few months ago in February.
You might be interested to read those comments in this blog:
Having said this, with interest rate rising, if AA REIT were to raise funds to strengthen its balance sheet, it isn’t a bad idea.
Unlike IREIT Global which retains 10% of its distributable income, AA REIT distributes 100% of its distributable income to investors.
This is a reason why IREIT Global’s balance sheet is so strong.
In another conversation in the comments section, I said that if AA REIT were to take a leaf from IREIT Global’s book and retained 10% of its distributable income, it might not be a bad idea too.
I said a lot more in those comments like why I was reducing my investment in Centurion Corp. but didn’t see a reason to do so for AA REIT yet.
You might want to read those comments which you will find in this blog:
You might also be interested in this blog:
