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.



Thursday, September 3, 2015

Analysis of Croesus Retail Trust - One of the highest yield in retail sector

Current Price on 3oth Aug 2015 = $0.895
  • Yield = 9.03%  
  • Price-to-book Ratio = 0.968
  • Assets per unit = $2.147
  • Debt per unit = $1.188 (including current liabilities)
  • Gearing = 56.6%
Croesus Retail Trust published their results at a time where everyone is panicky about stocks as it melts down. Let's take a closer look at what they have.

Yield is at one of the highest at 9.03%.  In fact, it is the highest among the retail reits, even better than LMIR. However, take note that both have assets in Japan and Indonesia respectively (instead of Singapore). With the recent revaluation, they are now trading at a discount, although a small one at 3% discount. Gearing (when include other liabilities) is at 56.6% which is extremely high.

Although they have a great yield at 9.03%, the market has counters which gave better returns (although it is not in the retail sector). Moreover, its gearing is quite alarming. I can get the same return at a much safer gearing. Price-to-book ratio is also not attractive enough for the yield that they are offering. I would say that they are just unfortunate.

I have no investment in this, and will monitor this counter since it offers high yield. But I will not buy this. There are better ones outside.

Monday, August 31, 2015

Analysis of Sabana REIT - A game of patience (waiting for it to grow back)

Current Price on 3oth Aug 2015 = $0.785
  • Yield = 9.17%  
  • Price-to-book Ratio = 0.739
  • Assets per unit = $1.762
  • Debt per unit = $0.700 (including current liabilities)
  • Gearing = 39.7%
  • Secured NAV = $0.456 (58.4% of trading price)
  • Credit Rating = Baa3
I have readers on facebook who ask me which are the recommended stocks after the meltdown. (http://www.facebook.com/sreitinvestmentblog). Well, here is one which I thought was a good one (if not a great one)

Yield is at one of the highest at 9.17%. There are some better ones like Global Investment Limited, IREIT Global, Accordia Golf Trust which are mainly overseas, or Viva Industrial Trust which is pretty much similar to Sabana REIT and it is local. However, one attractive point is their price-to-book ratio which is at 0.739. It means that we are buying an asset at 26% discount. Where do we get a property where they are so willing to sell at a discount? Gearing is at a healthy 39.7% which is quite standard and its credit rating is investment-grade.

I know that they are struggling with occupancy I believed is already priced-in. Moreover, after pricing in, we are still getting 9.17% yield which is very high. Imagine when the economy grows (better) again and occupancy went up, there is room for it to grow to 10% yield without acquisition or asset enhancement. Of course, you have to be patient, without knowing how long you need to wait.

I am only vested with 1,000 shares which I got at IPO. It seems that everytime I considered this, there will be something better. Cambridge Industrial Trust was one of my anchor investment until I sold it in 2013 (I think). AIMS AMP Industrial Trust was also one of my anchor investment until I sold it early this year. And now one of my anchor investment is Viva Industrial Trust. But it doesn't mean that this is not good. In fact, I think this is worthwhile considering to diversify (for my portfolio)

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$/IDR 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$/IDR. 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.

*Updated to change from INR to IDR... My careless error... Thanks my readers who pointed it out**