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#1 2017-03-19 03:25:15

Roswell Crash Survivor
Silver Stacker
From: Zeta Reticuli
Registered: 2011-04-11
Posts: 1,944
Trades :   32 

Industria REIT (IDR) Stapled Units - what's the catch?

A portfolio of 15 properties in QLD, VIC, NSW and SA.

50/50 warehouses and business park properties.

Paying 7.62% distributions per annum (even higher with franking credits, if your tax bracket is under 30%).

Claims to be 35% geared. Debt profile isn't too damning.

Units trading close to Net Asset Value (NAV) per unit.

What am I not seeing? Where's the "got'cha" moment?

http://www.industriareit.com.au

Last edited by Roswell Crash Survivor (2017-03-19 03:29:09)


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#2 2017-03-19 03:38:28

Gullintanni
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From: New Zealand
Registered: 2016-06-15
Posts: 359
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Re: Industria REIT (IDR) Stapled Units - what's the catch?

Well just at a quick glance their $159,000,000  Westrac holding looks very specialized premises and would be hard to reuse for anyone else wihout huge invetment.
I mention   this as it seems to be their biggest holding and Westrac has seen many many changes over the last2 decades and it would not be beyond the realm of possibility that one day EVERYTHING goes to China

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#3 2017-03-19 04:18:49

Roswell Crash Survivor
Silver Stacker
From: Zeta Reticuli
Registered: 2011-04-11
Posts: 1,944
Trades :   32 

Re: Industria REIT (IDR) Stapled Units - what's the catch?

Gullintanni wrote:

Well just at a quick glance their $159,000,000  Westrac holding looks very specialized premises and would be hard to reuse for anyone else wihout huge invetment.
I mention   this as it seems to be their biggest holding and Westrac has seen many many changes over the last2 decades and it would not be beyond the realm of possibility that one day EVERYTHING goes to China

Thanks for your input. I don't pretend to know much about mining, earthmoving or construction equipment.

So being a Caterpillar 'dealer', does it mean the site is a large sale lot for Caterpillar rigs (like a car dealer lot, but with diggers and mining trucks), or is it more of a specialized workshop/service center for heavy equipment?

Last edited by Roswell Crash Survivor (2017-03-19 18:29:55)


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#4 2017-03-19 15:10:52

Gullintanni
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From: New Zealand
Registered: 2016-06-15
Posts: 359
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Re: Industria REIT (IDR) Stapled Units - what's the catch?

I am no expert either mate smile
It was just that as their largest holding in $$$$$ it struck me as not beyond reason that at a whim it could be shut down.
I think they sell from here and do running repairs , but there seem to have been a massive amount of downsizing over the year and a lot of what they USED to do has been moved to China.

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#5 2017-03-19 15:43:47

Gullintanni
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From: New Zealand
Registered: 2016-06-15
Posts: 359
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Re: Industria REIT (IDR) Stapled Units - what's the catch?

I guess what i am trying to say is that if the company has assets of half a billion and 1/3 of that is tied up in a single holding it increses the risk of something going wrong.
They do not have all their eggs in one basket , but they do seem to have a large amount in a single lot.
Make any sense?

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#6 2017-03-19 16:36:05

Roswell Crash Survivor
Silver Stacker
From: Zeta Reticuli
Registered: 2011-04-11
Posts: 1,944
Trades :   32 

Re: Industria REIT (IDR) Stapled Units - what's the catch?

Gullintanni wrote:

I guess what i am trying to say is that if the company has assets of half a billion and 1/3 of that is tied up in a single holding it increses the risk of something going wrong.
They do not have all their eggs in one basket , but they do seem to have a large amount in a single lot.
Make any sense?

Insufficient diversification, got it.


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#7 2017-03-20 08:16:20

Radio8tiv
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Registered: 2016-12-02
Posts: 83
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Re: Industria REIT (IDR) Stapled Units - what's the catch?

the fundamentals do look pretty good for this newish small cap, but I noticed you mentioned they pay their dividends with franking credits which doesn't appear to be the case according to the Market Index site http://www.marketindex.com.au/asx/idr

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#8 2017-03-20 12:51:57

HoldMeTender
Silver Stacker
From: Nunya
Registered: 2016-01-06
Posts: 945
Trades :   14 

Re: Industria REIT (IDR) Stapled Units - what's the catch?

Westrac would be a tenant of choice IMO.  Worth looking at their lease term, likelihood of relocation, and legalities of breaking said lease.

Westrac's parent company SVW has been on a tear the last 12 months, not that that necessarily reflects Westrac's performance.

n.b., dividends noted as 7.4% unfranked, according to Commsec.  Have been pretty steady the last three years.  Still beats bank interest if downside risk is acceptable.

Its share price is less volatile than many supposed blue chips.

Last edited by HoldMeTender (2017-03-20 18:59:41)


All that glitters is not gold...
...but all that is gold glitters!

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#9 2017-03-20 22:05:41

Radio8tiv
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Registered: 2016-12-02
Posts: 83
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Re: Industria REIT (IDR) Stapled Units - what's the catch?

You could also look into RFF if your into REIT, they don't have as high a dividend and are also unfranked but they have a drip with a 1.5% discount and pay dividends quarterly which could be good for compounding your investment.

Last edited by Radio8tiv (2017-03-20 22:06:44)

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#10 2017-03-20 22:37:22

BuggedOut
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From: New South Wales
Registered: 2015-07-21
Posts: 1,771
Trades :   36 

Re: Industria REIT (IDR) Stapled Units - what's the catch?

I wouldn't touch it with a barge pole personally.

Chasing yield in this market is a recipe for disaster IMHO.  With interest rates so low those yield stocks would already be a crowded trade.

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#11 2017-03-20 23:36:22

HoldMeTender
Silver Stacker
From: Nunya
Registered: 2016-01-06
Posts: 945
Trades :   14 

Re: Industria REIT (IDR) Stapled Units - what's the catch?

^^ Good point. 

Related: would the REIT be exposed in the case of increasing interest rates?  I assume so...


All that glitters is not gold...
...but all that is gold glitters!

Windbag in Spandex

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#12 2017-03-21 01:46:01

phrenzy
Silver Stacker
From: Adelaide
Registered: 2014-10-18
Posts: 2,584
Trades :   101 

Re: Industria REIT (IDR) Stapled Units - what's the catch?

Also it's not recession proof, business parks and industrial estates in first world countries will be some of the hardest and first to be emptied and have write offs.

RFF is for farming and there's another for medical rooms. I'd be much more into those unless you have a very rosy Outlook for small and medium sized industry in Australia. Recent News about gas projects and feed into car factory style businesses tells me that 7% return isn't going to last.

I'd be long into RFF and Domacom for this sort of thing.


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"Hundreds would die, but not the thing they died for. 'A man can stand up..."

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#13 2017-03-21 02:50:27

Gullintanni
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From: New Zealand
Registered: 2016-06-15
Posts: 359
Trades :   

Re: Industria REIT (IDR) Stapled Units - what's the catch?

So roswell any "catches" highlighted?
You guys and gals are pretty bloody onto it.

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