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 $1,350/month.



Monday, August 24, 2015

What a meltdown... Updating my current holdings

What a meltdown recently with the stock market especially REITs. For REIT investors like myself, we are sitting on pretty large paper losses. For me, my portfolio went down by 6%. Moreover, I purchased Accordia Golf Trust at $0.65 which is just before their meltdown so I am sitting on even more paper losses.

The reason for meltdown by now is all over the news. China's sudden devaluation of currency plus impending US interest rate hike. The former is a surprise to all of us and is a bigger whammy than the US interest rate hike.

Is there anything good that comes out of this? Well, yields are stronger now. There are more choices aka yields above 8% compared to the previous year with price-to-book value lower than one. But we won't know when price is going up again so you need to have holding power. If you are holding on to cash, good! Because every investment dollar can generate more income.

For me, I have holding power currently so I am not worried. Just that I am a bit paralyzed i.e. should I really sell after such a meltdown? What happens if I sell then it goes back up? I have to admit that I am not strong in this. In fact, very weak. If you have any comments or advice, please share. I need them at this time.

Holding on...

Thursday, August 20, 2015

Analysis of Accordia Golf Trust

Current Price on 15th Aug 2015 = $0.655
  • Yield = 10.75%  
  • Price-to-book Ratio = 0.826
  • Assets per unit = $1.793
  • Debt per unit = $0.997 (including current liabilities)
  • Gearing = 55.7%
Accordia Golf Trust has reported their new set of results which I thought was quite favourable and got me excited actually. Here are the statistics.

Their yield is now clearer at 10.75% which is very high compared to REITs and Business Trust standards. It is higher than GlobalInv and Viva Industrial Trust which are my two anchor investments currently. Moreover, its price-to-book ratio is currently at 0.826 which means we are still buying at 20% discount to NAV which is of course good as well. Gearing is at a high of 55.7% but loan-to-value ratio is only about 25%. Deferred Tax on their liabilities is something I need to understand as it is the bulk of their liabilities.

One thing which makes it much less attractive is that they are all in Japanese Yen which means it is a more of a currency play than a REIT or business trust. It is just like LippoMall Retail Trust where currency plays a major role. And Japanese Yen hasn't been doing well recently. (The only currency doing well is US$)

All along, I have been looking for high yield investments which would generate a cashflow income for me and my family. And with the new statistics coming in strong, I don't see why I am not buying at this price even though it has moved up by 5% on 15th Aug. I have decided to switch some of my investments into this. The problem is which one.

Monday, August 17, 2015

Analysis of Viva Industrial Trust - Trying to grow in challenging conditions.

Current Price on 8th Aug 2015 = $0.765
  • Yield = 9.81%  
  • Price-to-book Ratio = 0.93
  • Assets per unit = $1.464
  • Debt per unit = $0.642 (including current liabilities)
  • Gearing = 43.8%
  • Credit Rating = BB
Viva Industrial Trust has been making a lot of news recently. They purchased two properties, have one major asset enhancement and now announcing another two acquisitions. The above statistics are an estimate which is from their recent report + proposed acquisitions, (which means it exclude the asset enhancements)

Their yield is probably the highest you can find in REIT market. Only IREIT Global is higher but Viva Industrial Trust's properties are all local so you can see the physical property plus it is easier to monitor the economic conditions as being a Singaporean, it is natural to be more aware of local conditions. Price-to-book ratio maintains at 0.93 which means we are buying at a discount. If their asset enhancement is a success, valuation may go up further. Thus, according to my indicators, they are good for long term.

One thing to note is that they need to raise cash again to purchase these properties. While I am neutral to raising cash, I don't like it to have private placement as it is not beneficial to existing investors (they did it in once this year which I manage to participate). I prefer a rights issue for all investors which is fair. This piece of news should come soon, later this month.

I am heavily vested in Viva Industrial Trust (79,100 shares worth about $60,000). Was thinking of paring it down by a bit so as to reduce exposure but then I need to wait for the right price to unload and another opportunity as well.

Thursday, August 13, 2015

Analysis of Global Investment Limited - A "savings account" with 9.93% interest

Current Price on 8th Aug 2015 = $0.151
  • Yield = 9.93%  
  • Price-to-book Ratio = 0.719
  • Assets per unit = $0.217
  • Debt per unit = $0.007 (including current liabilities)
  • Gearing = 7.15%
Global Investment Limited reported their results which I needed to look into very closely. Here are the statistics.

Yield is stable at 9.93%. With scrip dividend, it may rise to 11.46% if their issuing price is $0.13. Moreover, their price-to-book ratio is at 0.719 with no debt. Thus, we are only looking at the quality of assets which the bulk is in equities and bonds. Thus, it looks like we are investing in a unit trust than a company.

One thing to note is that amount of profit vs the amount used to distribute dividends. Currently their overall profit is at $9.7 million and their dividend distribution is $10.4 million (even though most will be in scrip). This is something which I am concern about because they are slowly not able to generate enough profit to maintain their distribution. I hope that the profit can be higher than distribution.

I am highly vested with 595,000 shares and I will be collecting $4,400 worth of dividends. I am participating in scrip dividend which should give me an extra $500. I am, at this point, still holding on to long term.

Tuesday, August 11, 2015

Analysis of LMIR - more of a S$/INR currency play than REIT

Current Price on 8th Aug 2015 = $0.36
  • Yield = 8.11%  
  • Price-to-book Ratio = 0.916
  • Assets per unit = $0.73
  • Debt per unit = $0.337 (including current liabilities)
  • Gearing = 46.2%
  • Credit Rating = Baa3
LippoMalls Retail Trust recently reported their results which was less than normal. They have been great in INR terms but the currency losses have been significant.

Their yield is currently at 8.11% which was below expectations. Moreover, due to S$/INR, price-to-book ratio increases because assets values drop and now it is in 0.916. Both are although achieving my expectations, were found to edge closer to my criteria. The only positive is that they have obtained a credit rating and they are now investment-grade.

LMIR is more of a currency play than a REIT because of the large fluctuation (and mainly drop) of S$/INR. Oh well, I actually know of this risk when I purchase 30,000 shares and was thinking that Indonesia economy is going to do well. Looks like they needed more time. I am sitting at a paper loss but I am ready to hold on to long term.

Saturday, August 8, 2015

Update on Rights Issue of OUE Commercial Trust and IREIT Global

Dear readers,

In the execution of the "excess rights strategy", I have managed to obtain an extra of about 1,000 shares of OUE Commercial Trust (at $0.555) and 450 shares of IREIT Global (at $0.468). Thus, the exercise helped me to earn about $120 in OUE Commercial Trust and about $100 in IREIT Global.

However, because of the recent drop in share price, I am actually sitting on a paper loss overall for both so quite sad though. Many REITs went down by about 5%. Is it a buying opportunity? I am not sure. The signal needs to be clearer only in September.

Ok. That's all for now. I have updated my J5Investment page to show you my current investment portfolio.

Anyway, Happy 50th Birthday Singapore! Wishing all Singaporeans (including myself) happy holidays and reflect on the journey that we have taken so far. :-)

Tuesday, July 28, 2015

Analysis of Viva Industrial Trust

Current Price on 24th July 2015 = $0.81
  • Yield = 9.13%  
  • Price-to-book Ratio = 0.974
  • Assets per unit = $1.403
  • Debt per unit = $0.572 (including current liabilities)
  • Gearing = 40.7%
  • Credit Rating = BB
Viva Industrial Trust reported their results on Friday which is pleasing to me as I am vested with 79,100 shares worth $64,000. Let's look at the statistics.

Yield is at a high of 9.13% which is probably one of the highest in the market. Only Accordia Golf Trust and IREIT Global REIT has higher yields. Moreover, due to the major increase in valuation of TPCC in their portfolio (an increase of $100 million), price-to-book ratio has fallen to 0.974 which is below the critical value of 1. This means that we are buying at a discount to NAV which is fantastic.

One thing to note is that their credit rating for both the trust and its MTN has been downgraded to BB and BB+ respectively. Downgrade means that its credit profile is not doing well although the downgrade is not major. Nevertheless, there is an impact on interest rates should they decide to raise funds or secure debts.

I am heavily vested and I am glad that I have managed to participate in the private placement which I manage to make a paper profit (I bought it at $0.793). However, to place $64,000 in Viva Industrial trust is something which I will ponder for a while as it may be a bit too much. May pare down a bit and transfer to something else.