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 $3,800/month.

Thursday, January 16, 2020

Analysis of Far East Hospitality Trust - Running away

Current Price on 15th Jan 2020 = $0.78
  • Yield = 4.67%  
  • Price-to-book Ratio = 0.896
  • Assets per unit = $1.417
  • Debt per unit = $0.546 (including current liabilities, perpetual securities and non-controlling interest)
  • Gearing = 38.5%
  • Secured NAV = $0.871 (111% of trading price)
I sold Far East Hospitality Trust sometime last year and I have to say that I regret it a lot because ever since I sold it, it has been heading north. Here are the statistics.

With current yield of 4.67%, it is much lower than most REITs in the market. However, one attractive factor is that their secured NAV is at 111% of their trading price. It means that if they are selling off their properties today, we will be getting $0.871 per share which is fantastic. Moreover, this secured NAV is not tied to any loans which makes it even safer.

I forgot why I sell off much earlier last year already. Probably I was looking at other counters when I did it. But I failed to see the value of secured NAV then which would be much higher. Well, it is too late.

Their yield is very low as of now, trading closer to a bond offering which shows how secure their income is, considering that there is a lack of supply and demand is increasing in the hospitality sector.

Nevertheless, I am now vested with OUE Commercial Trust which has a hospitality component so will be looking at that first before any decision is to be taken. Having said that, Far East Hospitality Trust has moved too far and I am not going to chase it.

Monday, January 6, 2020

Analysis of LMIR - Divestment. What do they do with the cash?

Current Price on 31st Dec 2019 = $0.225

Estimated Data after Divestment
  • Yield = 8.96%  
  • Price-to-book Ratio = 0.721
  • Assets per unit = $0.725
  • Debt per unit = $0.413 (including current liabilities, perpetual securities and non-controlling interest)
  • Gearing = 57% (Classifying perpetual securities as debts)
  • Secured NAV = $0.312 (137% of trading price)
LMIR has recently announced that they plan to sell two of their malls at a discount to their NAV. Both their NAV and their Yield fell which is quite natural actually because of their assumption of placing the $120 million in fixed deposits which definitely will lower the yield. Above is the estimate of how it will look like after the sale.

I think the key is how they are going to use this cash of S$120 million to enhance the portfolio. In my opinion, they should focus on paring down debt of swapping some of their debts with cheaper loans. They have quite a lot of debts where their debt interest is very high at around 5% to 7%. Even margin accounts have lower interest rates. I guess the reason why they still take the loans is because their property yield is even higher at around 9%. I think they will use some of the proceeds to pay off a $75 million debt which is due in June 2020 (at 4.1%) but that is a relatively cheaper loan.

However, there is also another acquisition that is upcoming which requires cash. The property yield of that is 9.4% which is very high. Thus, if they deploy this cash to invest might still be a good idea. The only issue is that their gearing would still be very high.

This is a high risk REIT with high property yield and high debt interests as well. I am vested with 180,000 shares at about $40,000. As long as they can maintain their property, as much as possible pare down their debts to reduce their gearing, it is still worth to consider investing.

Tuesday, December 31, 2019

It has been a while... Thanks for being patient with me.

Hi everyone,

It has been a long while since I blog about my investments. It has really been a busy year and somehow blogging about my investments took a back seat. However, I am still monitoring my investments but not as frequent as I should. There are missed opportunities which I am just thankful that I did not lose money.

2019 has been a good year because apart from the passive income that I am getting, I have also some capital gains which I am really thankful for. Here are the details.

Overall Capital: $423,000 (An increase of about $43,000)
Passive Income: $48,000 (About $4,000 per month)

It somehow cushion the great disappointment that I have in 2018 where I have to endure large capital losses. I also have to endure large drops from HPH Trust, Eagle Hospitality Trust and SoilBuild REIT which I am still holding on. I am just thankful that there are other counters like Accordia Golf Trust, Dasin Retail Trust, Sasseur REIT, Cromwell REIT, OUE Commercial REIT, Global Investment Trust which puts me back in the black.

Moving on to 2020, I am looking forward to about $50,000 worth of passive income which helps to pay my housing installment, car installment, and my utilities bills, telco bills. I am not expecting any capital appreciation as per normal in my budget calculations so that any capital gains are a bonus to me. I just hope that I don't endure anymore capital losses which is overwhelming.

Happy and Blessed 2020. I hope to blog more in the year ahead to keep up and do more detailed analysis as much as I can so that I am manage my portfolio better.

Monday, July 22, 2019

INVEST FAIR 2019 from 17th Aug to 18th Aug.

This is just to let everyone know that there is another investment fair which is coming up on 17th Aug to 18th Aug. It is call INVESTFAIR 2019. Well, it would be great to invest your time in yourself through this fair to gain knowledge and wisdom. And It's Free! Moreover, if you pre-register (before 15th August), you get a free investment ebook. Here are the details

Date: 17th Aug 2019 - 18th Aug 2019
Venue: Suntec Singapore.

It could just be the greatest investment that you can make. So do sign up if you are interested.

Tuesday, July 16, 2019

Analysis of Keppel REIT - Big and Steady but...

Current Price on 15th July 2019 = $1.26
  • Yield = 4.41%  
  • Price-to-book Ratio = 0.962
  • Assets per unit = $2.223
  • Debt per unit = $0.914 (including current liabilities, perpetual securities and non-controlling interest)
  • Gearing = 41.1%
  • Secured NAV = $1.309 (103% of trading price)
It has been a while since I research on Keppel REIT. I remember it was one of my anchor investments a few years back. But I have sold it long time ago and never look back. They are a big REIT in terms of assets and market capitalization. Now I just want to take a look and see how far it has come.

With a yield of 4.41%, their yield is actually lower than some of the bonds that is offered in the market. It is probably one of the lowest yielding REIT currently. However, its price-to-book ratio is 0.962 which means we are still buying at a small discount to NAV. Moreover, all their debts are unsecured which means their Secured NAV is at 103% of their trading price. Thus, it provided quite a strong margin of safety.

I like its secured NAV because it shows how secure my investments will be and it is actually higher than the current trading price. Just that the yield is way too low to be attractive. If you want a more secure, stable big REIT, like a blue chip, this is a good one. But upside will probably be minimal unless they are able to improve their DPU in a substantial way. For me, I prefer to give this a miss as it is way below my criteria for yield.

Monday, June 24, 2019

Analysis of Mapletree Logistics Trust - Is it worth the price?

Current Price on 15th June 2019 = $1.58
  • Yield = 5.12%  
  • Price-to-book Ratio = 1.35
  • Assets per unit = $2.23
  • Debt per unit = $1.06 (including current liabilities and perpetual securities)
  • Gearing = 47.5%
  • Secured NAV = $1.17 (74% of trading price)
One of my friends messaged me saying that he has bought into Mapletree Logistics Trust and it prompts me to just take a look at it. MLT's share price shot up by a lot recently from $1.23 at the start of the year to its current price at $1.58. I took time to look at the statistics of this REIT.

Their yield is now at 5.12% which is quite low, probably the lowest among the industrial REITs. Their price-to-book ratio also seems to be very high at 1.35 which means we are buying at a premium of 35%. Their gearing is also quite high considering perpetual securities and non-controlling interest at 47.5%. The only saving grace is that they do have secured NAV of $1.17 which is 74% of its current trading price.

I wonder what prompt my friend to buy into this counter at this price where there are other suitable ones. Even if you are looking for a very strong sponsor, there is still Ascendas REIT and Fraser Logistics and Industrial Trust or even Mapletree Industrial Trust which all have better statistics. The only thing that would keep this counter at this price is the Fed Rate cut which benefit all REIT counters. I am not optimistic and think that this price is not sustainable.

Monday, June 17, 2019

Analysis of OUE Hospitality Trust & OUE Commercial Trust

Current Price of OUE Hospitality Trust on 15th June 2019 = $0.705
  • Yield = 6.70%  
  • Price-to-book Ratio = 0.94
  • Assets per unit = $1.233
  • Debt per unit = $0.483 (including current liabilities and perpetual securities)
  • Gearing = 39.2%
It has been a while since they have announced their merger with OUE Commerical Trust. It seems that the market does not really like the deal so the price of both REITs went down. I have made a calculation on the statistics about what happens after the merger and here it is. 

Firstly, every 1,000 shares (which cost $705) will give you 1,358 shares of OUE Commercial Trust and $40.75 of cash payout. Therefore, I took $705 - $40.75 = $664.25. And use $664.25 / 1,358 shares and it gives me a conversion price of $0.489 of OUE Commercial Trust shares. So here is the statistics after conversion.

Conversion Price to OUE Commercial Trust on 15th June 2019 = $0.489
  • Yield = 7.36%  
  • Price-to-book Ratio = 0.786
  • Assets per unit = $1.286
  • Debt per unit = $0.645 (including current liabilities and perpetual securities)
  • Gearing = 50.9%
And we compare it to OUE Commercial Trust before merger.

Current Price of OUE Commercial Trust on 15th June 2019 = $0.505
  • Yield = 7.13%  
  • Price-to-book Ratio = 0.739
  • Assets per unit = $1.581
  • Debt per unit = $0.898 (including current liabilities and perpetual securities)
  • Gearing = 56.8%
From the statistics, it looks like a good deal for OUE H-Trust shareholders with increased yield, and better price-to-book ratio. For OUE Commercial Trust shareholders, its price to book ratio went up which sort of diluted their NAV although their yield is still quite comparable. Therefore it looks like a bad deal for OUE Commercial Trust shareholders and I do agree.

However, I do notice that gearing of OUE C-Trust went down from 56.8% to 50.9%. Do note that OUE C-Trust has substantial perpetual securities which is expensive. Although it is treated as equity in SGX, it is treated as debts in my point of view which is why their gearing is so high and different from their published gearing. I suspect that OUE C-Trust is facing issues which require their gearing to be brought down and this is probably one good way to bring it down substantially. In other words, OUE H-Trust is used to rescue OUE C-Trust.

Nevertheless, when a rescue is conducted, it is usually at favourable terms to the rescuer. Thus, OUE H-Trust shareholders will still benefit more (with increased yield and price-to-book ratio) while OUE C-Trust paid the price to achieve lower gearing and therefore more stability in its balance sheet.

I took the opportunity to enter 50,000 shares of OUE H-Trust at $0.68 earlier last month as I could not figure out why the drop is so substantial. I saw it more as an opportunity. And I guess if you want to earn based on the cheaper conversion price (of $0.489 compared to current price of $0.505), the opportunity is still there.