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 $1,700/month.

Tuesday, October 25, 2016

Analysis of Capital Commercial Trust - Office REITs still at a very low yield

Current Price on 20th October 2016 = $1.60
  • Yield = 5.75%  
  • Price-to-book Ratio = 0.916
  • Assets per unit = $2.698
  • Debt per unit = $0.951 (including current liabilities)
  • Gearing = 35.3%
  • Credit Rating = A3
Capital Commercial Trust has reported their results. To be frank, I have not been interested in them for a long time due to their low yield and pretty high volatility in trading price. Let's take a look at the statistics first.

With a yield of 5.75%, the yield is quite low. But considering that you are buying into a reputable management and strong sponsor, it adds to the credibility. Its price-to-book ratio is much better at 0.916 which means we are buying at an 8% discount. Its gearing is quite healthy and it has a strong credit rating of A3 which is better than most unrated bonds in the market. Thus, their yield is probably quite comparable or even lower.

While I understand the strength of the management which resulted in high trading price, I do not believe that it will be value adding to my portfolio. I am looking at high yield + discount to NAV which probably add some risks into my portfolio but also gives me a higher passive income. Thus, I still won't consider this into my portfolio.

Friday, October 21, 2016

Analysis of Sabana REIT - Bottoming out?

Current Price on 20th October 2016 = $0.53
  • Yield = 9.06%  
  • Price-to-book Ratio = 0.599
  • Assets per unit = $1.528
  • Debt per unit = $0.644 (including current liabilities)
  • Gearing = 42.1%
Sabana REIT has published their set of results which I thought was reasonable. I am vested with 41,000 shares which I earn close to $500 in dividends for this round. Let's take a look at the statistics.

With a yield of 9.06%, it is currently one of the highest yielding REIT with only local exposure. What is more attractive is that its price-to-book ratio is only 0.599 which means we are buying at a big discount of 40%. No doubt information on valuation is very limiting but this is still the best gauge for us retail investors. Their occupancy has been stable at 88% which is quite comparable to the big boys which are at around 91%.

There are a lot of talks on the management and thus the price is quite depressed. Well, I think it has already been priced in and this is a good opportunity to enter with such cheap valuation by the market. With some cash coming, this is one of my top choice to enter the market. My only consideration is that I am already heavily vested in industrial properties.

Monday, October 17, 2016

Analysis of Soilbuild REIT

Current Price on 16th October 2016 = $0.70
  • Yield = 7.99%  
  • Price-to-book Ratio = 0.907
  • Assets per unit = $1.275
  • Debt per unit = $0.503 (including current liabilities)
  • Gearing = 39.5%
Soilbuild REIT has published their results recently which I thought wasn't very favourable. Let's take a look at the statistics.

With a yield of 7.99%, its yield is what I call normal. Cache Logistics Trust, Sabana REIT, and Viva Industrial Trust are all trading at a higher yield. Moreover, its price-to-book ratio is 0.907 which means we are buying at 9% discount. While this is better than most industrial REITs, Sabana REIT is trading at a much lower price-to-book ratio (Of course, they have some issues with leasing so it is a greater challenge to them) Gearing is at a stable 39.5%.

With all these statistics, I think there are other REITs which I would consider. Increasingly, the Price-to-Book Ratio is a more important factor than yield as with economic slowdown, I will be looking at value more than yield. Let me try to take a look at other REITs first.

Tuesday, October 4, 2016

Analysis of Accordia Golf Trust - Considering seriously again.

Current Price on 4th October 2016 = $0.68
  • Yield = 9.85%  
  • Price-to-book Ratio = 0.68
  • Assets per unit = $2.221
  • Debt per unit = $1.228 (including current liabilities)
  • Gearing = 55.3%
Accordia Golf Trust is one of the unique business trust holding on to golf course assets and earning revenue from there. One of my readers asked about Accordia Golf Trust so here is the analysis.

With 9.85% yield, it is probably one of the highest yielding trust in SGX. Moreover, with appreciation of Yen to $1 to 74, the yield will just get higher. It's price-to-book ratio is also at 0.68 which means we are buying at a 32% discount. One concern is the gearing which is at 55.3% which is very high.

I remember I invested in this before and sold it when the statistics are not as good. I was wrong that time and a combination of factors made it attractive again. With all parameters fulfilling my criteria and with some cash coming in soon, this is one of the counters which I will consider seriously to invest in again. One point to note is also the fluctuation of Japanese Yen is a concern to me as it is a currency risk. I hope that it will be stable enough to generate a stable passive income.

Thursday, September 29, 2016

Analysis of Rickmers Maritime - Make or Break Time

Current Price on 23rd September 2016 = $0.043
  • Yield = No Yield  
  • Price-to-book Ratio = 0.093
  • Assets per unit = $1.004
  • Debt per unit = $0.542 (including current liabilities)
  • Gearing = 54%
This is one Business Trust which is entering crisis mode where either it makes it or it goes bust with all shareholders receiving nothing back. It is asking shareholders and noteholders to consider the current proposal. But before that, let's take a look at the statistics.

With price-to-book ratio of 0.093, it means we are buying at 9.3% value. Of course, this is meaningless because it is going bust soon. However, if their proposal goes through, the statistics will look like this.

  • Yield = No Yield  
  • Price-to-book Ratio = 0.202
  • Assets per unit = $0.402
  • Debt per unit = $0.189 (including current liabilities)
  • Gearing = 47%
With debts maturing at only 2021, it gives them 5 years to work out further details, conserve cash and float through this difficult periods. Plus we are actually buying at 20.2% value and not really 9.3% which was stated earlier even if we buy now. With reduced interest rates, I hope that they are able to float.

This looks like a distress assets with extremely bad credit rating. The question is whether are we willing to give them another chance at probably realize some value from the investments which are actually ships which transport containers. To me, it looks more like making a gambling bet, something which I won't do. Maybe after they have voted for the proposals then I can look at it again. 

Monday, September 26, 2016

Rights issue of Frasers Hospitality Trust - Aftermath

Current Price on 23rd September 2016 = $0.70
  • Yield = 7.45%  
  • Price-to-book Ratio = 0.872
  • Assets per unit = $1.286
  • Debt per unit = $0.502 (including current liabilities)
  • Gearing = 39.0%
It has been a while since I posted an analysis. I guess the busyness has taken a toll on me. Will try to get the rhythm back. Here is the another analysis on FHT. Fraser Hospitality Trust has recently announced their rights issue. While I missed the earlier deadline, it is still worthwhile to look at it.

Yield is at a modest 7.45% which is quite comparable to its peers, especially after it dropped from the TERP price they published which is $0.745. Its price-to-book ratio is also at 0.872 which means we will be buying at 13% discount. Having said that, there are other hospitality trusts which are trading at cheaper valuations like Far East Hospitality Trust.

With all these analysis, I think it is still not attractive enough to be considered, considering that other hospitality trusts are trading at the same yield with lower price-to-book ratio. I still won't consider this in my portfolio. 

Monday, August 15, 2016

Analysis of Soilbuild Business Trust - Gaining Attention

Current Price on 14th August 2016 = $0.665
  • Yield = 9.41%  
  • Price-to-book Ratio = 0.842
  • Assets per unit = $1.305
  • Debt per unit = $0.515 (including current liabilities)
  • Gearing = 39.4%
Soilbuild Business Trust recently caught my attention because of its pricing. It now ranks close to Sabana REIT and Viva Industrial Trust in terms of yield and price-to-book ratio. Let's look at the statistics.

The yield is currently at 9.41% which is quite attractive. It is also quite comparable to Sabana REIT (at 9.55%) and Viva Industrial Trust (at 9.52%). Its price-to-NAV ratio is at 0.842 which means you are buying at 15% discount to their valuation. While it is not really comparable to Sabana, it is higher than Viva Industrial Trust. Gearing is at 39.4% which is quite manageable.

On my hand, I have some investments in AIMSAMP Industrial Trust which has recently moved up in price. Although it is good, the statistics may not be favourable anymore so I am looking at something else to change it to and this is definitely one of my options which I am evaluating now. I already have exposure in Sabana and Viva so may want to think of diversifying. However, I am heavily exposed to industrial REITs so this would also be one of the considerations as well.