Keppel Reit – Distribution yield

When Federal Reserve Chairman Ben Bernanke told Congress on 22 May 2013 that Fed may cut the pace of bond purchases at the next few meetings, the bond market reacted negatively pushing yield higher and bond prices lower. The real estate investment trust (Reit) which depends on the debt market took a hit as well. Prices of Reits fell across the board from May last year.

It was also in May 2013 when I begin to accumulate Keppel Reit. (The reason was due in part of scrip dividend given out to Keppel Corp shareholders. That is another story.)

I went on to buy more Keppel Reit as prices declined. By September, I had 9,000 units of Keppel Reit. The average cost of each unit was $1.3687.

Price of Keppel Reit as at 30 March 2014 was $1.14. This translates to a price decline of 16.7%.

The total distribution per unit of Keppel Reit for 2013 was $0.0788 which was 1.4% higher compared to 2012. The distribution yield based on my average cost was 5.75% per annum. If Keppel Reit continues to give out that level of distribution yearly, 5.75% yield is not bad.

Copyright © 2014, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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