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.

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.

Thursday, June 6, 2019

Analysis of LippoMalls Retail Trust - Is the worst over?

Current Price on 30th May 2019 = $0.215
  • Yield = 10.23%  
  • Price-to-book Ratio = 0.718
  • Assets per unit = $0.712
  • Debt per unit = $0.412 (including current liabilities and perpetual securities)
  • Gearing = 57.9%
LMIR is an Indonesian REIT which has a lot of bad news because of its parent trying to raise cash, which leads to LMIR acquiring property from Lippo Group. Details of the funding are still not out yet. But let's take a look at the statistics currently.

With a yield of 10.23%, it is the highest yielding REIT on SGX and it is very difficult to have acquisition can be yield accretive. I guess they need to use more debt which I doubt so because their gearing is already at 57.9% (including perpetual securities) Its price-to-book ratio is 0.718 which means we are buying at 28% discount which is also attractive. However, the problem is that the gearing is very high at 57.9% including perpetual securities. It will be great if it could reduce its gearing but equity is very expensive for LMIR.

For LMIR, the rupiah is finally relatively stable and I am not expecting rupiah to drop further. Therefore, its DPU should now be stable. For now, the key is managing debt rather than acquisition. If they are able to reduce their gearing or reduce their interest expenses, it will be very helpful to DPU.

I have just bought another 150,000 shares at $0.21, increasing my shareholdings to 180,000, giving me a potential return of $330 per month. Will be increasing my holdings soon once they start their rights issue.

Thursday, May 30, 2019

Analysis of Eagle Hospitality Trust - A rare opportunity after price drop.

Current Price on 30th May 2019 = US$0.70
  • Yield = 9.13%  
  • Price-to-book Ratio = 0.795
  • Assets per unit = $1.541
  • Debt per unit = $0.66 (including current liabilities)
  • Gearing = 42.3%
Eagle Hospitality Trust has just been listed at a price of $0.78. It is under-subscribed which means there is very little demand and it is natural that the price dropped to US$0.70. However, now at this price is it very attractive? Let's take a look at the statistics.

The current yield is at 9.13% which is extremely high. Only LMIR has a higher yield but it is based in Indonesia while Eagle Hospitality Trust is at the United States. Moreover, its price-to-book ratio is at 0.795 which means we are buying at a 20% discount which is also attractive. Gearing is at 42.3% which is quite high actually.

I subscribed 5,000 shares through IPO which I regretted because I did not really look at the news relating to this IPO. However, after the price drop, I thought that it is attractive enough so I bought another 30,000 shares at $0.705. It is still at this price but I am a long-term investor so, with this price which I thought was fair, I will be enjoying the dividends that they are giving out.

Saturday, April 13, 2019

*** REITs Symposium Advert***

***This is a sponsored post. And this is probably the first time you see such a post here :-)***

I would like to share an upcoming REITs Symposium where we can get to learn and know more about REITs directly from the people in the industry.

Date:18th May 2019, Saturday

Time: 9am to 6pm

Venue: Sands Expo and Convention Centre, Level 4, Roselle Simpor Ballroom

Price: As below.

Just some more info for you to know what to expect.

- Guest of Honor will be Mr Loh Boon Chye, CEO of SGX

- More than 75% SREITs will be present

- Face time with the REITs managers

- Panel discussions where attendees can post their questions online

- A feature which focused on REITs 101 – educating beginner investors to kick start investing in this asset class such as how to evaluate the metrics of a REIT.

BONUS: When you key in my promo-code "sreitinvestmentblog", you will receive a mystery gift from them. And it is only for the first 30 sign-ups.

So here is the link and the price.

$24 option with Carpark Coupon – http://www.shareinvestor.com//sg/events/signup?id=1394