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 $1,450/month.



Friday, November 13, 2015

Analysis of AIMSAMP REIT - An organic growth story

Current Price on 7th Nov 2015 = $1.35
  • Yield = 8.30%  
  • Price-to-book Ratio = 0.874
  • Assets per unit = $2.337
  • Debt per unit = $0.792 (including current liabilities)
  • Gearing = 33.9%
AIMSAMP REIT has released their results and also went XD.  Thus, their price went down by a bit. Let's take a look at the statistics.

Yield is at 8.30% which is quite healthy, higher than the big boys like Ascendas REIT but lower than smaller players like Sabana and Viva Industrial Trust. Price-to-book ratio is at 0.874 which means we are buying at about 12.5% discount. It is a small Christmas sale. Gearing is at a safe 33.9%.

I have always view this as a growth REIT because they have a lot of properties which can be redeveloped to maximise their plot ratio. You can see that every now and then, there will be at least one property undergoing redevelopment which helps to enhance the value of our investments. In short, there is a lot of opportunities for growth rather than to compete for acquisition and it is almost a sure-win bet everytime they redevelop. Thus, even if the yield is slightly lower, it is still worth it to hold.

I do have 11,600 shares which is placed in my CPF investment account. Earlier I have sold all of my cash holdings and switch it to another counter (Viva Industrial Trust). I will hold on to what I have in my CPF investment account to continue to enjoy the growth.

** A reader pointed out that it is called Organic growth instead of inorganic growth. My bad and thanks to my reader :-)***

Wednesday, November 11, 2015

Analysis of LMIR - Growing but impacted by S$/IDR exchange

Current Price on 7th Nov 2015 = $0.33
  • Yield = 9.3%  
  • Price-to-book Ratio = 0.887
  • Assets per unit = $0.702
  • Debt per unit = $0.33 (including current liabilities)
  • Gearing = 47.0%
LMIR has released their results which is encouraging considering that their distribution improved (it is a see-saw ride) which improves the yield. Due to the exchange rates, their NAV has dropped as well.

Yield is at 9.3% which fulfill my 8% yield criteria which is good, Price-to-book ratio is at 0.887 which means we are buying at 11% discount for this portfolio of properties. Just note that they are all Indonesia-based where the exchange rate fluctuates so the NAV also fluctuates. Gearing is at high of 47.0% which to me, has room to be brought down.

LMIR has a put option which I think they may choose not to exercise as the selling of the property to pay debt does not seem to be a good choice (infer from their announcements). They are trying to extend the put option so that the necessary admin procedure can be done in due course. Well, let's see what they do and react from there but there is one thing that I know. Price is not going to go up very much.

I am vested with 30,000 shares which I am still holding on. I bought at a high price so sitting at a paper loss but I am thinking of selling it. Seems too unstable for comfort.

Monday, November 9, 2015

BHG Retail REIT on track for Singapore listing | The Edge Markets

BHG Retail REIT on track for Singapore listing | The Edge Markets

Saw this in the news so share with all. I am not vested though as its yield is actually lower than Capital China Retail Trust which is bigger and more stable. I won't subscribe to it, no matter what happens.

Monday, November 2, 2015

Lone Star affiliate buys Saizen REIT's Japan portfolio for $370 mln | TODAYonline

Lone Star affiliate buys Saizen REIT's Japan portfolio for $370 mln | TODAYonline

Well, the deal is confirmed. Lone Star affiliate is buying Saizen REIT's Japan portfolio which is at $1.172 per unit. This is great for me as I took a position in hope that the deal will go through and it has.

I have 11,000 shares so the proceeds should be about $12,893. Minus off the capital I put in which is $10,230, I earn $2,663 less commissions. Wow! Not bad for such a short investment period.

One of my readers ask me what will happen to Saizen REIT. I think it will close and wind down instead of rebuilding a portfolio so we have one less REIT in the SGX market. But it raises the profile of REITs which has been trading at a discount to NAV. If Saizen REIT, one of the weaker REITs in the market if you compare their credit rating, can sell their assets at NAV value, how about the rest? Thus, I believe if you manage to buy below NAV, you are just enjoying the discount.

Wednesday, October 28, 2015

Analysis of First REIT - My former darling which is no longer attractive

Current Price on 17th Oct 2015 = $1.345
  • Yield = 6.19%  
  • Price-to-book Ratio = 1.319
  • Assets per unit = $1.639
  • Debt per unit = $0.619 (including current liabilities)
  • Gearing = 37.8%
First REIT has published their results which in my opinion, is strong and resilient as all healthcare REITs are. The problem is the price which in my opinion is too high. Moreover, when the price is high, it is not resilient anymore.

Yield is at 6.19% which miss my 8% yield criteria by a lot. Price-to-book ratio is at 1.319 which means we are buying at 32% premium for this portfolio of properties. I don't know whether anyone is in the right mind to pay so much more for a property. Gearing is at 37.8% which is still healthy.

First REIT was my anchor investment many years back and they have helped me and my portfolio grow. Having said that, I believe that it is no longer attractive. With the yield and price-to-book ratio both not hitting my criteria (and way beyond), I believe that the price is no longer resilient and I am not going to invest in it.

Monday, October 26, 2015

Analysis of Saizen REIT - Going to be taken over... Wow!

Current Price on 24th Oct 2015 = $0.925
  • Yield = 6.34%  
  • Price-to-book Ratio = 0.779
  • Assets per unit = $2.028
  • Debt per unit = $0.841 (including current liabilities)
  • Gearing = 41.4%
Saizen REIT announced that they have an offer on their table to be taken over or buy over their assets which I thought is very rare and everyone should take notice of what is going on in this episode. They did not reveal a lot but looks from the sudden increase in price (close to 10cents recently already), there are people who is banking that it will materialize. Let's take a look at the statistics

Yield is now at a modest 6.34% after trading at 7+% for quite a while. It looks low, but if you are buying over everything, it look decent actually. NAV is currently at $1.188 which is about 22% more than the trading price. It means that there is a chance that the takeover price will be higher than the current trading price. In the best scenario, it will be 22% higher (Buying at NAV price)

If I were to look at this, the deal for us look like this. If it materialize, investors will earn between 10 - 22% over the next few months. If it does not materialize, price will fall by about 10% aka back to its original trading price. If you have bought it earlier (I did not), your margin of safety will be higher and returns will be higher as well. Sounds like taking a fifty-fifty risk. Looking at the way they wrote the announcement aka using the word "Firm Offer", they seem to be positive about the deal.

To me, this is a test on how accurate the annual valuation is as I have been using it to do my price-to-book ratio. If they sell it at a cheaper price than its NAV, it cast doubts on their valuation process and also affect other REITs as well. But if they manage to sell at NAV, it will give a big boost to all other REITs.

Now is what am I going to do? If I take the risk with $10,000, the range of my profit/losses will be between $1,000 loss and $2,200 gain. Am I going to risk more? Well, I would like to try and gain some experience from it. I need to get myself into the game also to feel the emotional aspects of it.

Thursday, October 22, 2015

Analysis of Soilbuild REIT

Current Price on 17th Oct 2015 = $0.785
  • Yield = 7.88%  
  • Price-to-book Ratio = 1.034
  • Assets per unit = $1.300
  • Debt per unit = $0.502 (including current liabilities)
  • Gearing = 38.6%
SoilBuild REIT has published their results which in my opinion, shows a lot of resilience in their portfolio and renewal of leasing. Here are the results.

Yield is at 7.88% which just miss my 8% yield criteria. Price-to-book ratio is at 1.034 which means we are buying at 3.4% premium for this portfolio of properties. Gearing is at 38.6% which is still healthy.

In their report, it was shown that about 26% of their NLA is expiring. At the same time, 784,000 sqft of space is leased out already and this is more than 20% of their NLA with slight increase in rental. It means that they are not going to suffer from a big drop in their occupancy which helps to maintain their DPU.

Having said that, I believe that it is already priced in. With the yield and price-to-book ratio both not hitting my criteria, I am not investing it although the fundamentals are good. (I realize that I am a bit more of a risk-taker than conservative)