Sheng Siong Group

[weijian]

It makes sense to buy these commerical properties, after all they will appreciate in price in the long run!
Or sell it cheap to the LIM Brothers and lease it back! win-win mah! :O

I guess it depends on the investment horizon. I think we all agree that SS can weather most storms based on their business model.

Looking at it on the long term, I would feel that buying properties in land limited Singapore serves as a solid business plan. No doubt in the short term, the balance sheet and cash flow (and dividends) may be affected but long term, they won't be at the mercy of the landlord. As someone mentioned before, hedge against rental spikes.

I'm not sure what's going to happen next year or the year after but I'm long SS. Similarly with some of our reits that's currently taking a short term beating

Personally, i find it puzzling that it can be a 'win-win' in an IPT scenario. My gut sense advises me to read between the lines and maximise my common sense thinking whenever it surfaces.

I am also generally wary when everyone (management, investors) start talking about the 'long term'. To have a long term, we first need to survive the short term and then prosper in the medium term. Is long term talk a convenient reliever for short term pain?

SSG has a robust business model and it takes something to rise up and find its own feet in a small crowded market like Singapore, especially with government-backed NTUC. Moreover, it is subjected to positive investor bias (most investors can see, touch and observe its operations). But at the end of the day, PRICE will be a strong determinant of future LONG TERM returns.