In-Depth REIT Analysis
1. Keppel DC REIT (KDCR) – The AI Infrastructure Play
Investment Thesis:
- Sector Leadership: Pure-play data centre REIT positioned at the intersection of AI boom and digital transformation
- Geographic Diversification: Assets across Asia-Pacific and Europe, reducing single-market risk
- Strong Fundamentals: 59.4% YoY growth in distributable income, 96.5% occupancy rate
Key Strengths:
- Low Interest Rate Sensitivity: Only 1.1% DPU decline for 0.5% rate increase – exceptional in current environment
- Scalable Growth: AUM grew 5x since IPO (2014-2024), from ~S$1B to S$5B
- Financial Flexibility: Recent divestment of Kelsterbach Data Centre provides capital for growth
- Debt Management: Only 2.2% of debt maturing in 2025
Risk Factors:
- Technology sector volatility and potential AI bubble risks
- High capital requirements for data centre expansion
- Regulatory changes in data privacy/sovereignty laws
2. Capitaland Ascott Trust (CLAS) – The Hospitality Diversification Champion
Investment Thesis:
- Largest Lodging Trust: S$8.9B in assets across 46 cities in 16 countries
- Stable Income Base: 70% of gross profit from master leases (predictable income)
- Recovery Play: Positioned for post-pandemic hospitality recovery
Key Strengths:
- Geographic Risk Mitigation: Diversified across multiple markets reduces concentration risk
- Strategic Acquisitions: Japanese hotel acquisitions improved portfolio quality (2x NOI vs divested properties)
- Currency Hedging: Diversification naturally hedges against currency fluctuations
- Operational Stability: Master lease structure provides income certainty
Risk Factors:
- Global economic slowdown affecting travel demand
- Geopolitical tensions impacting international travel
- Currency translation risks despite hedging
3. AIMS APAC REIT (AAREIT) – The Industrial Steady Eddie
Investment Thesis:
- Industrial Focus: Exposure to Australia and Singapore industrial markets
- Defensive Characteristics: Industrial properties typically have longer leases and stable tenants
- Value Enhancement: Active AEI program improving asset quality
Key Strengths:
- Lease Stability: 4.4-year WALE provides predictable cash flows
- Asset Enhancement: Optus Centre Campus revitalization expanding tenant appeal
- Clean Balance Sheet: No refinancing required for FY2026
- Solid Occupancy: 93.6% occupancy rate demonstrates demand
Risk Factors:
- Limited growth prospects compared to data centres
- Economic sensitivity of industrial tenants
- Competition from new industrial developments
4. Frasers Centrepoint Trust (FCT) – The Suburban Retail Resilience Story
Investment Thesis:
- Suburban Focus: Positioned in Singapore’s growing suburban areas
- Consumer Spending Growth: Benefits from increasing household incomes and new home development
- Active Management: Continuous tenant refreshment and mall upgrades
Key Strengths:
- Traffic Growth: 1% YoY increase in shopper traffic, 3.3% in tenant sales
- Financial Health: 38.6% leverage, decreasing cost of debt (3.9%)
- Tenant Diversification: 41 new-to-portfolio tenants in 1H FY2025
- Strategic Positioning: Located near new residential developments
Risk Factors:
- E-commerce competition is affecting retail demand
- Changing consumer shopping patterns
- Singapore retail market saturation
Portfolio Management Strategies
Core-Satellite Approach
Core Holdings (60-70%):
- Diversified REITs: CLAS for geographic diversification
- Defensive REITs: AAREIT for stability
- Focus on consistent dividend payers with strong balance sheets
Satellite Holdings (30-40%):
- Growth REITs: KDCR for AI/tech exposure
- Cyclical REITs: FCT for economic recovery plays
- Tactical allocations based on market cycles
Risk Management Framework
Diversification Metrics:
- Sector Limit: Maximum 25% in any single property sector
- Geographic Limit: Maximum 40% in any single country (excluding Singapore base)
- Single REIT Limit: Maximum 15% of portfolio in any single REIT
Quality Screens:
- Minimum 3-year dividend history
- Debt-to-assets ratio below 45%
- Interest coverage ratio above 2.5x
- Occupancy rates above 90%
Rebalancing Strategy:
- Quarterly review of allocations
- Annual strategic rebalancing
- Opportunistic rebalancing during market dislocations (>10% deviation from targets)
MAS Regulatory Framework
Current Leverage Limits (2025)
MAS maintains a minimum ICR of 1.5 times at all times, with a leverage limit of 50%, which is among the strictest globally. This representation from the previous complex, tiered structure
Key Regulatory Requirements:
- Single Aggregate Leverage Limit: 50% for all REITs (up from previous 45%)
- Minimum Interest Coverage Ratio: 1.5x (recently revised to provide relief)
- Enhanced Disclosure Requirements: Greater transparency in financial reporting
Regulatory Benefits
Tax Advantages:
- REITs must distribute at least 90% of taxable income to maintain tax transparency.
- No corporate tax on distributed income
- Withholding tax exemptions for confident foreign investors
Market Development Initiatives: Over 90% of S-REITs and property trusts own properties outside Singapore, supported by the Monetary Authority of Singapore (the Monetary Authority of Singapore (MAS) policies encouraging regional expansion.
How to Access REITs
Direct Investment Methods
1. Singapore Exchange (SGX)
- Brokerage Accounts: DBS Vickers, OCBC Securities, UOB Kay Hian, Interactive Brokers
- Minimum Investment: No minimum, but consider brokerage fees
- Trading Hours: 9:00 AM – 5:00 PM SGT
- Settlement: T+2 (trade date plus two days)
2. Central Depository (CDP) Account
- Required for direct shareholding
- Automatic dividend collection
- Annual statements provided
Indirect Investment Options
1. REIT ETFs
- Advantages: Instant diversification, lower minimum investment
- Lion-Phillip S-REIT ETF: Tracks Singapore REIT index
- Expense Ratios: Typically 0.5-0.8% annually
2. Unit Trusts/Mutual Funds
- Professional management
- Higher fees but active management
- Suitable for smaller investors
Investment Platforms
Traditional Brokers:
- Full-service brokers: DBS Vickers, OCBC Securities
- Research reports and advisory services
- Higher fees but comprehensive support
Digital Platforms:
- Tiger Brokers, moomoo, eToro
- Lower fees, mobile-friendly
- Limited research and advisory
- Robo-Advisors:
- StashAway, Syfe
- Automated portfolio management
- REIT allocation as part of diversified portfolios
Investment Considerations & Best Practices
Timing Strategies
Dollar-Cost Averaging: Regular monthly investments reduce timing risk.. Value Opportunities: Market dislocations often create attractive entry points. Dividend Calendar: Understanding ex-dividend dates for optimal timing
Tax Considerations
Dividend Taxation: Most REIT dividends are tax-exempt for Singapore residents. Foreign Withholding: Consider tax treaties for international real estate investment trusts (REITs). Capital Gains: No capital gains tax in Singapore for retail investors
Due Diligence Checklist
- Financial Health: Debt ratios, interest coverage, cash flow trends
- Asset Quality: Occupancy, lease terms, geographic concentration
- Management Track Record: Historical performance, strategic decisions
- Market Dynamics: Sector trends, supply-demand fundamentals
- Valuation: Price-to-book, yield comparison, NAV discount/premium
Common Pitfalls to Avoid
- Yield Chasing: High yields may signal distress
- Sector Concentration: Over-exposure to single property types
- Leverage Timing: Avoid highly leveraged REITs in rising rate environments
- Liquidity Neglect: Consider trading volumes for larger positions
Conclusion
The Singapore REIT market offers compelling opportunities across different risk-return profiles. KDCR represents growth potential, CLAS provides diversification, AAREIT offers stability, and FCT captures domestic consumption growth. Success requires disciplined portfolio management, a thorough understanding of the regulatory framework, and access strategies tailored to individual circumstances.
The recent MAS regulatory updates have strengthened the framework while maintaining flexibility, positioning Singapore REITs as attractive investment vehicles for income-focused investors in 2025 and beyond.
The REIT Awakening
Chapter 1: The Revelation
Mei Lin stared at her latest bank statement over her morning kopi at the void deck coffeeshop in Sengkang. The numbers mocked her—S$85,000 sitting in her savings account, earning a pathetic 0.05% interest while inflation devoured her purchasing power like a hungry ghost.
At thirty-two, she had been diligently saving since her first job as a marketing executive fresh out of NUS. But watching her friends complain about rising HDB prices and her own rent taking up nearly 40% of her salary, she realized her “kiasu” saving mentality wasn’t enough anymore.
“Auntie, are you still eating or what? Other people waiting,” grumbled the uncle at the following table, eyeing her untouched half-boiled eggs.
Mei Lin mumbled an apology and took a bite, but her mind was elsewhere. Her colleague David had been bragging about his investment returns again yesterday—something about REITs paying him “passive income every quarter.” She had always dismissed his investment talk as gambling, but the numbers he threw around were starting to sound less like luck and more like strategy.
That evening, she found herself Googling “Singapore REITs for beginners” while her Netflix show played in the background, unwatched, unwatched.
Chapter 2: The Education
Three weeks of obsessive research later, Mei Lin’s browser history looked like a financial analyst’s fever dream. She had devoured everything from SGX’s REIT guides to investment forums where uncles debated the merits of Capitaland versus Frasers with the passion usually reserved for football matches.
Her lightbulb moment came while reading about Keppel DC REIT. Data centres—she understood this. Her company’s entire digital marketing operation relied on cloud services, and with everyone discussing AI and ChatGPT, demand was expected to grow. It wasn’t just about collecting rent from office buildings; it was about investing in the backbone of the digital economy.
She called her father that Sunday during their usual family dinner.
“Pa, you remember how you always told us property is the best investment?”
Her father, a retired accountant who had bought their Toa Payoh flat for S$80,000 in 1985, nodded sagely. “Property never goes down in Singapore, girl. Government won’t let it.”
“What if I told you I could invest in property without needing a million dollars?”
This caught his attention. Mei Lin explained REITs in her father’s language, pointing out how they were regulated by the Monetary Authority of Singapore (MAS), how the companies had to distribute 90% of their income, and what it was like owning a tiny piece of Marina Bay Sands or Changi Airport.
“So it’s like… buying shares in the landlord?”
“Exactly, Pa. And the landlord pays me rent every quarter.”
Her father’s scepticism slowly transformed into curiosity, especially when she showed him the dividend yields compared to bank interest rates.
Chapter 3: The First Investment
Armed with her research and her father’s cautious blessing, Mei Lin opened a CDP account and signed up with DBS Vickers. The interface initially appeared intimidating—a sea of numbers, graphs, and acronyms that seemed designed to confuse rather than illuminate.
She started small, investing S$5,000 each in four different REITs:
Keppel DC REIT – Her conviction plays on the AI boom. Capitaland Ascott Trust – Geographic diversification across Asia. AIMS APAC REIT – The boring but steady industrial option.ion Frasers Centrepoint Trust – Her bet on suburban Singapore’s growth
The moment she clicked “Buy,” her heart raced like she was at the casino. But this wasn’t gambling—she had spreadsheets to prove it.
Chapter 4: The Roller Coaster
The first few months were a psychological marathon. Mei Lin found herself checking her portfolio multiple times a day, her mood swinging with the green and red numbers on her phone screen. When the US Fed hinted at more rate hikes, her REITs dropped 5% in a week, and she almost panic-sold everything.
“You see? I told you these things are risky,” her mother said when Mei Lin made the mistake of mentioning her paper losses during CNY dinner.
But then the dividends started arriving. Small amounts at first—S$47.50 from KDCR, S$52.30 from CLAS. It wasn’t life-changing money, but seeing “Distribution from REIT” in her bank statement felt like finding money in her old jeans pocket.
The real test came during the March market correction. Tech stocks were plummeting, and even her beloved KDCR dropped 12% in two days. Her WhatsApp was flooded with panicked messages from investment chat groups.
Instead of selling, Mei Lin did something that surprised even herself—she bought more. Her research had taught her about dollar-cost averaging, and her spreadsheet showed KDCR was now trading below its book value. If she believed in the long-term story, this was an opportunity knocking.
Chapter 5: The Vindication
By year-end, Mei Lin’s portfolio had grown to S$23,500 from her original S$20,000 investment, plus she had collected S$1,200 in dividends. A 12% total return wasn’t going to make her rich overnight, but it was twenty-four times better than her savings account.
More importantly, she had learned to think like an investor rather than a saver. She understood why KDCR’s occupancy rates mattered, why CLAS’s geographic diversification was valuable during the slowdown in China, and why AAREIT’s industrial properties wSuccessually reassuring.
Her Success caught the attention of her colleagues. During a team lunch, her manager, Jennifer, asked about her investment strategy.
“You know, my husband keeps talking about crypto and growth stocks, but I just want something stable that pays dividends,” Jennifer confided.
Mei Lin found herself explaining REITs with the same enthusiasm David had shown her months earlier. She discussed the MAS regulations that protect investors, the transparency requirements, and the tax advantages. She even showed Jennifer her spreadsheet, which tracked each REIT’s fundamentals.
“Wait, so you’re basically collecting rent from shopping malls and office buildings without being a landlord?”
“Exactly! And datacentress, hospitals, student housing—there are REITs for everything now.”
Chapter 6: The Expansion
By her second year, Mei Lin had developed her own investment philosophy. She allocated 60% of her REIT investments to her “core” holdings—diversified, stable REITs, such as CLAS and AAREIT, that paid consistent dividends. The remaining 40% went to “satellite” investments—higher-risk, higher-reward plays, such as KDCR and specialized real estate investment trusts (REITs) in emerging sectors.
She had also learned to read the market cycles. When interest rates peaked and REIT prices were beaten down, she added to her positions. When yields compressed and prices soared, she took profits and waited for better opportunities.
Her portfolio had grown to S$45,000, generating over S$2,000 annually in dividends—enough to cover her mobile phone bills, Netflix subscriptions, and the occasional weekend getaway.
But the real victory was psychological. She no longer felt helpless as her savings eroded due to inflation. She had skin in the game, a stake in Singapore’s economic growth. When she walked through Marina Bay or Orchard Road, she didn’t just see buildings—she saw cash flow, occupancy rates, and rental reversions.
Chapter 7: The Teacher
Three years into her REIT journey, Mei Lin had become the unofficial investment advisor among her friends and family. Her younger brother, Marcus, fresh out of the military, came to her for advice about investing his National Service (NS) savings.
“Jie, everyone’s talking about Tesla and Bitcoin. Should I buy those instead?”
Mei Lin smiled, recalling her from a prison to a vendetta and pulled up her portfolio performance—a steady 8-10% annual return with quarterly income.
“Marcus, let me ask you something. Do you want to get rich quick, or do you want to build wealth?”
She explained the difference between speculation and investment, between hoping for capital gains and collecting income. She showed him how REITs had allowed her to participate in Singapore’s property market without the massive capital requirements or the hassle of being an actual landlord.
“Think about it this way,” she said, using her father’s analogy. “Every time someone stays at a hotel, shops at a mall, stores data in a server farm, or works in an office building, you get a tiny cut of the action. It’s like owning a slice of Singapore’s economic engine.”
Marcus was sceptical at first—REITs sounded boring compared to the excitement of meme stocks and crypto. But when Mei Lin showed him her dividend statements and explained how compound growth worked, his eyes lit up with the same realization she had experienced years earlier.
Epilogue: The Portfolio
Five years after her first REIT purchase, Mei Lin sat in the same coffeeshop where her journey had begun. Her portfolio had grown to S$85,000—precisely what she had started with in her savings account, but now it was working for her, generating S$4,500 annually in dividend income.
She had weathered market crashes, interest rate cycles, and economic uncertainty. She had learned to read balance sheets, understand yield curves, and most importantly, control her emotions during market volatility.
Her investment thesis had also evolved. She now understood that REITs weren’t just about collecting dividends—they were about participating in the structural trends shaping Singapore’s economy. Digitalization is driving demand for data centres, the ageing population is creating opportunities in healthcare REITs, and the growth of e-commerce is boosting logistics properties.
As she sipped her kopi and reviewed her quarterly dividend statements on her phone, Mei Lin felt a quiet satisfaction. She wasn’t rich—not yet—but she was building wealth systematically, one dividend payment at a time.
Her phone buzzed with a message from her colleague: “Mei Lin, my nephew wants to start investing. Can you teach him about REITs?”
She smiled and typed back: “Sure, tell him to meet me at the void deck coffee shop this Saturday. That’s where all good investment stories begin.”
The uncle from the following table, who had witnessed countless young Singaporeans hunched over their phones in this exact spot, looked up from his newspaper and nodded approvingly. Another saver had become an investor. Another person had learned that in Singapore, there was always a way to make your money work harder than you do.
The End
Author’s Note: This story is fictional, but the investment principles and REIT information are based on real market conditions and regulations as of 2025. Always conduct your own research and consider your risk tolerance before making an investment.
How to Invest in REITs: Complete Step-by-Step Guide
Quick Start Summary
Minimum Investment: As low as S$120 for 1 lot (100 units). Best for Beginners: Dollar-cost averaging with a monthly investment of S$500-1,000. Recommended Allocation: 20-30% of investment portfolio. Expected Returns: 6-10% annually (dividends + capital gains)
Step 1: Choose Your Investment Method
Option A: Direct REIT Investment (Recommended for Control)
Best For: Investors who want to pick individual REITs and have complete control
Requirements:
- CDP (Central Depository) account
- Brokerage account with SGX access
- Minimum S$1,000-2,000 to start (for diversification)
Option B: REIT ETFs (Recommended for Beginners)
Best For: New investors wanting instant diversification
Popular Options:
- Lion-Phillip S-REIT ETF (CLR): Tracks the Singapore REIT index
- Nikko AM Singapore STI ETF: Includes REITs as part of the broader Singapore market
Option C: Robo-Advisors with REIT Exposure
Best For: Hands-off investors
Options:
- Syfe REIT+: Dedicated REIT portfolio (0.4-0.65% annual fees)
- StashAway: REIT allocation within diversified portfolios
Step 2: Set Up Your Investment Account
Traditional Full-Service Brokers
DBS Vickers
- Pros: Comprehensive research, established platform
- Cons: Higher fees (min. S$25 per trade)
- Best For: Large investments (>S$10,000 per transaction)
OCBC Securities
- Pros: Integrated with OCBC banking, good research
- Cons: Similar high fees
- Best For: OCBC bank customers
UOB Kay Hian
- Pros: Strong regional presence, suitable for international REITs
- Cons: Higher minimum commissions
Digital/Discount Brokers (Recommended for Most Investors)
Tiger Brokers
- Commission: From S$1.99 per trade
- Pros: Low fees, mobile-friendly, fractional shares
- Cons: Limited local research
moomoo
- Commission: From S$1.99 per trade
- Pros: Advanced charting tools, social features
- Cons: Primarily mobile-focused
Interactive Brokers
- Commission: From US$1 per trade
- Pros: Global access, professional tools
- Cons: Complex interface for beginners
Setup Process:
- Open CDP Account: Visit the SGX website or any brokerage
- Complete KYC: Provide NRIC, income details, investment experience
- Fund Account: Bank transfer or GIRO setup
- Download Trading App: Most brokers offer mobile platforms
Step 3: Develop Your REIT Investment Strategy
Portfolio Allocation Models
Conservative (Beginners)
- 40% Diversified REITs (CLAS, FCT)
- 30% Defensive REITs (AAREIT, MIT)
- 20% Growth REITs (KDCR)
- 10% Cash for opportunities
Balanced (Intermediate)
- 30% Singapore REITs
- 30% Regional REITs
- 25% Sector-specific REITs (data centres, healthcare)
- 15% REIT ETFs for diversification
Aggressive (Advanced)
- 50% High-growth REITs (data centres, logistics)
- 30% International REITs
- 20% Specialized REITs (student housing, healthcare)
Dollar-Cost Averaging Strategy
Monthly Investment Plan:
- S$500/month: Split across 2-3 REITs
- S$1,000/month: 4-5 REIT positions
- S$2,000+/month: Full diversification across sectors
Sample S$1,000 Monthly Allocation:
- S$300 → Keppel DC REIT (growth)
- S$250 → Capitaland Ascott Trust (diversification)
- S$250 → AIMS APAC REIT (stability)
- S$200 → Opportunistic purchases during dips
Step 4: REIT Selection Criteria
Financial Health Checklist
Essential Metrics:
- Debt-to-Assets: <45% (lower is better)
- Interest Coverage Ratio: >2.5x (higher is better)
- Occupancy Rate: >90% (higher is better)
- Dividend Yield: 4-8% (sustainable range)
Red Flags to Avoid:
- Declining occupancy for 2+ quarters
- Rising debt levels without asset growth
- Dividend cuts in recent years
- Management changes or governance issues
Sector Selection Guide
Defensive Sectors (Lower risk, steady income):
- Industrial REITs (AIMS APAC REIT)
- Suburban retail (Frasers Centrepoint Trust)
- Healthcare REITs
Growth Sectors (Higher risk, growth potential):
- Data centres (Keppel DC REIT)
- Logistics/e-commerce (Mapletree Logistics Trust)
- Student housing
Diversification Plays:
- Hospitality (Capitaland Ascott Trust)
- Mixed-use developments
Step 5: Execute Your First REIT Purchase
Market Order vs Limit Order
Market Order (Buy immediately at current price):
- Use When: Small amounts, liquid REITs
- Pros: Immediate execution
- Cons: Price uncertainty
Limit Order (Buy only at specified price or better):
- Use When: Larger amounts, volatile markets
- Pros: Price control
- Cons: May not execute
Trading Tips
Best Trading Hours:
- 9:00-10:00 AM: Highest volume, best for market orders
- 2:30-5:00 PM: Lower volume, better for limit orders
Lot Size: Singapore REITs trade in lots of 100 units. Example: If KDCR trades at S$1.85, one lot costs S$185 + brokerage fees
Cost Calculation Example
Purchase: 500 units of Keppel DC REIT at S$1.85
- Cost: 500 × S$1.85 = S$925
- Brokerage: S$1.99 (Tiger Brokers)
- Total: S$926.99
Step 6: Monitor and Manage Your Portfolio
Quarterly Tasks
Dividend Collection:
- REITs typically pay quarterly dividends
- Automatically credited to your bank account
- Track dividend yield vs purchase price
Portfolio Rebalancing:
- Review sector allocation quarterly
- Rebalance if any position is off the REIT portfolio by 25% ofthe REIT portfolio
- Add to the underperforming quality REITs
Annual Review Checklist
- Performance Analysis: Compare returns vs STI, S-REIT index
- Dividend Sustainability: Check if REITs maintained/grew distributions
- Optimization: Consider new REIT sectors or geographies
- Tax PlOptimizeOptimise timing of gains/losses
Step 7: Advanced Strategies
Rights Issues and Corporate Actions
Rights Issues: Opportunity to buy new units at a discount
- Action: Usually accept to maintain the ownership percentage
- Consideration: Ensure you have funds available
Mergers/Acquisitions: REITs occasionally merge
- Action: Review terms, may trigger rebalancing
International REIT Access
US REITs: Available through Interactive Brokers, Tiger Brokers. Regional REITs: Many Singapore REITs have international assets.Currency Hedging: Consider SGD-hedged international REIT ETFs
Common Mistakes to Avoid
Beginner Mistakes
- Yield Chasing: High yields often signal problems
- Sector Concentration: Don’t put everything in one property type
- Timing the Market: Dollar-cost averaging beats market timing
- Ignoring Fundamentals: Focus on business quality, not just dividends
Emotional Mistakes
- Panic Selling: REITs are volatile but typically recover
- FOMO Buying: Don’t chase hot sectors without research
- Analysis Paralysis: Start with small amounts while learning
Getting Started Action Plan
Week 1: Education
- Read REIT annual reports
- Understand key metrics (NAV, DPU, occupancy)
- Choose 3-4 REITs for initial research
Week 2Opencount Setup
- Opea n CDP account
- Choose and open a brokerage account
- Fund account with an initial investment amount
Week 3: First Purchase
- Start with S$1,000-2,000 across 2-3 REITs
- Use limit orders for better pricing
- Set up dividend reinvestment if available
Month 2+: Build Routine
- Monthly investments of S$500-2,000
- Quarterly portfolio review
- Annual strategy assessment
Summary: Your REIT Investment Roadmap
Immediate Actions (This Week):
- Choose broker: Tiger Brokers or moomoo for low fees
- Open accounts: CDP + chosen brokerage
- Fund account: Start with S$2,000-5,000
First Month:
- Buy first REITs: Focus on quality over quantity
- Set up a monthly investment plan
- Trackthe performance of Success’s app
Long-term Success (6+ Months):
- Build a diversified REIT portfolio across sectors
- Maintain a 6-8% average dividend yield
- Target 8-10% total annual returns
Remember: REIT investing is a marathon, not a sprint. Focus on quality REITs, maintain discipline with regular investments, and let compound growth work in your favour over time.
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