Welcome to my investment blog where I share with you my analysis of REITs in Singapore.

I hope that my investment philosophy will bring me a steady stream of income apart from my job. I am aiming for at least $3,000 per month which can sustain the current expenses of myself and my family.

Do enjoy reading my blog and post any comments that you have. I welcome them because it is a time to learn from each other.

When I am looking at investing in REIT, here are some of the guidelines that I am looking at. Feel free to comment on it. I am willing to listen to ideas.

-> at least 8% yield.
-> Price that is lower than its NAV.
-> Low gearing (if possible)
-> High secured NAV.

Current Dividend income is $1,700/month.

Friday, May 13, 2016

Analysis of Manulife US REIT IPO - A proxy for US Properties?

IPO Price = US$0.83
  • Yield = 6.76%  
  • Price-to-book Ratio = 1.059
  • Assets per unit = $1.286
  • Debt per unit = $0.502 (including current liabilities)
  • Gearing = 39.0%
Finally we have a REIT IPO in our midst for listing. And this is unusual because this is going to be the first US REIT listed in SGX. Let's look at the statistics.

With a yield of 6.76%, I don't think it is that exciting. However, it is comparable to most office REITs like Suntec REIT or Capitaland Commercial Trust and which have most of their properties in Singapore. Their price-to-book ratio is not exciting as well, pricing it as one of the most expensive (but comparable to IREIT Global which is investing in European properties.) Gearing is at 39.0% which is quite close to the max.

Thus, I wonder why they are able to price it at the top end of their indicative range which shows that there is a demand for such properties. Maybe it is US-based which I have no knowledge about, especially their valuation process and also the yield. What I know is that US$ is still on the rise (although very slowly) so there is a currency advantage.

Since it is priced at the top end, I am going to assume that there is a lot of demand which is going to push the price up. If I manage to get hold on to some shares, I may just sell it off quickly at a profit.

Analysis of Ascendas REIT

Current Price on 9th May 2016 = $2.44
  • Yield = 6.08%  
  • Price-to-book Ratio = 1.125
  • Assets per unit = $3.695
  • Debt per unit = $1.526 (including current liabilities)
  • Gearing = 41.3%
  • Occupancy = 87.9%
Ascendas REIT has announced their results. I am interested to research on this only because it acts as a proxy to other industrial REITs. Let's look at the statistics.

Yield is at 6.08% which is hardly exciting. Price-to-book ratio is at 1.125 which means we are buying at a premium and that is not attractive. Gearing is at 41.3% (including other liabilities) which is just ok. Occupancy is at 87.9% which probably reflects how weak the leasing market is considering that they are the market leader.

Analyzing this counter gave me more confidence in other counters like Sabana REIT, Viva Industrial REIT, Cambridge REIT, AIMSAMP Industrial Trust, Cache Logistics Trust etc. Because they are so large, they become the standard which others hope to achieve. This set of data shows me that other REITs should at least be trading at valuation price which I have always believed. With such statistics, I can see a lot more upside for the rest of the Industrial REITs. In fact, I won't be surprised if they launch a takeover for one of the smaller REITs listed on SGX.

I won't be entering Ascendas REIT. It is too expensive for me and I expect the price to drop actually. It is just a reference for analysis of other REITs.

Tuesday, May 10, 2016

Analysis of LippoMalls Retail Trust - A way to invest in Indonesia through SGX

Current Price on 9th May 2016 = $0.325
  • Yield = 10.22%  
  • Price-to-book Ratio = 0.858
  • Assets per unit = $0.694
  • Debt per unit = $0.315 (including current liabilities)
  • Gearing = 45.4%
  • Occupancy = 94.7%
  • Secured NAV = $0.379 (116% of trading price)
LippoMalls Retail Trust has announced their results which I thought was quite good. I tried to enter the market by queueing up but the price went up and I was unable to purchase more shares. Anyway, here are the details.

With a yield of 10.22%, it is the highest yielding REIT in the market. It is at least one percentage point away from the next highest which is Viva Industrial Trust. Moreover, their price-to-book ratio is 0.858 which means we are buying at 14% discount to valuation price. Gearing is at 45.4% with current liabilities and only unsecured debt. This means that their secured NAV is quite high at 116% of trading price. Please note that all assets are based in Indonesia.

Indonesia continues to grow at a moderate pace of 5% which I thought it was nice to be able to participate in their growth. Compared to Singapore where growth is much subdued, it is time to invest in other regions. But I will still invest through SGX. With the current price, I will enter to secure more units soon.

Friday, May 6, 2016

Updates on my Current Holdings

Many things has happened where I have not updated my portfolio on this blog. Thus, here are all the updates.

I sold Saizen REIT earlier to raise funds to buy OUE Hospitality Trust to participate in their rights issue. It turns out that I regret it as I earn $1,000 lesser. However, it is compensated because after participating in their rights and subsequently subscribing to their excess rights, I earned about $600. Thus, I still earn something which I thought was nice.

Here is my portfolio which comprises of $215,000 worth of investments and $20,000 debt. It is giving me a net monthly income of $1,700 which is pretty good for me. Have been enjoying the dividends for quite some time now and it is really a strong passive income for my family.

Wednesday, May 4, 2016

Analysis of Viva Industrial Trust

Current Price on 3rd May 2016 = $0.73
  • Yield = 8.98%  
  • Price-to-book Ratio = 0.90
  • Assets per unit = $1.363
  • Debt per unit = $0.552 (including current liabilities)
  • Gearing = 40.5%
  • Occupancy = 86.9%
Viva Industrial Trust is one counter which I monitor closely because I am holding on 79,100 shares worth about $57,000. With the current announcement, let's take a look at the statistics.

Yield is at 8.98% which is quite ok in my opinion. One of the higher yields among the industrial REITs but not the highest. Cache Logistics Trust is higher. Their price-to-book ratio is at 0.900 which means that we are buying at 10% discount. This becomes tricky because there are others like Cambridge Industrial Trust, Sabana REIT which are much cheaper. Gearing is at 40.5% and their debt rating is at Ba2 equivalent.

I have included occupancy in the statistics from now on just to reflect assets which are not generating income. At 86.9%, it is probably one of the lowest among the REITs, even lower than Sabana REIT which is perceived to be in trouble due to falling occupancy. I would say that their occupancy is quite stable and there is potential room for growth in tenancy.

I am still holding on to this, but may pare down to reduce risks due to single counter. Some REIT must come with better statistics for it to happen.

Tuesday, April 26, 2016

Analysis of Cache Logistics Trust

Current Price on 25th Apr 2015 = $0.89
  • Yield = 9.16%  
  • Price-to-book Ratio = 1.014
  • Assets per unit = $1.478
  • Debt per unit = $0.601 (including current liabilities)
  • Gearing = 40.6%
Cache Logistics Trust deserve some attention because it is currently the one with highest yield among the Industrial REIT. Let's take a look at the statistics.

With a yield of 9.16%, it is the one with highest yield among the industrial REIT, beating Viva Industrial Trust by a whisker. The rest are all below 9%. However, a strange thing is that its price-to-book ratio is 1.014 which means we are buying at a slight premium. This is unusual because most of the REITs are trading at a discount. Gearing is at 40.6% which is managable but not very safe.

I am shifting to put more weight to price-to-book ratio which helps me to manage my portfolio risk which at this point is more important. Thus, I won't enter if it is trading at a premium.

Monday, April 11, 2016

Analysis of Sabana REIT

Current Price on 5th Apr 2015 = $0.64
  • Yield = 9.38%  
  • Price-to-book Ratio = 0.72
  • Assets per unit = $1.586
  • Debt per unit = $0.696 (including current liabilities)
  • Gearing = 43.9%
  • Secured NAV = $0.382 (60% of trading price)
Sabana REIT has been struggling with occupancy which is dropping by quite a lot with their current rate at 87.7%. I am expecting it to drop further when there are other rent expiry. Thus, I am expecting distribution yield to fall further by 10% - 15%.

Yield is currently at 9.38% but if it drops further, it may reach 8% only. One saving grace is that their price-to-NAV is much lower at 0.72 which means we are able to buy it at 28% discount. This is due to the lower yield that is coming in. Gearing is at 43.9% and their secured NAV is at 60% of their trading price.

I think if they are able to retain their current tenants, it will be a success in itself as they would be able to maintain distribution at current levels. Therefore if it really happens, it is actually a good time to enter this REIT with organic potential for further growth (although it will come only in two year's time when economy recovers)

One more thing is about consolidation of REITs sector which was previously mentioned. Sabana REIT is a small REIT which is susceptible for take over by other REITs or private funds. Thus, with such deep discounts to NAV, I won't be surprised that someone will take notice and purchase these properties at a discount and wait for it to rise.

I have a very small portfolio on this and will consider entering only after I look at other counters.