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 $700/month.



Wednesday, April 29, 2015

Analysis of LippoMall Trust

Current Price on 16th Apr 2015 = $0.355
  • Yield = 8.00%  
  • Price-to-book Ratio = 0.80
  • Assets per unit = $0.779
  • Debt per unit = $0.335 (including current liabilities)
  • Gearing = 43.0%
Recently, I am back looking at LippoMalls Trust because it has been steadily moving upwards. Here is the statistics.

Yield is good at 8.00%. Indonesian Rupiah is currently already stable between 9,400 and 9,600. Thus, I thought that the yield and the price-to-book ratio will be quite stable from this point. With price-to-book ratio at 0.80, we are buying at 20% discount which is ideal as a margin of safety for me.

If you notice, recently I have been looking at foreign REITs simply because I am worried about the impact on the impending rising US interest rates. I am believing that the impact will be lesser in other countries than in Singapore because Japan are more active in managing their currency and Indonesia has been doing well as well. These REITs also gives me a large margin of safety by buying at big discounts, reducing risks.

I am not sure whether I am right but these are some risks that I am going to take.

Monday, April 27, 2015

I was right... Wow! (Analysis of Viva Industrial Trust)

S-REIT Investment Blog: Analysis of Viva Industrial Trust

In November when they bought the two properties and I also bought (and sold) the units for Viva Industrial Trust. I predicted that their yield will increase up to 9.5% (based on $0.80) and yes it did. My only miss is that I sold it before I get to enjoy the benefits (please see my last post.)

Current Price on 24th Apr 2015 = $0.84
  • Yield = 8.90%  
  • Price-to-book Ratio = 1.085
  • Assets per unit = $1.427
  • Debt per unit = $0.653 (including current liabilities)
  • Gearing = 45.8%
  • Secured NAV = $0.185 (22%)
  • Credit Rating = BB+
With the current yield, I believe that it is (still) the highest that you can find in the market where it holds properties at 8.90%. However, price-to-book ratio is strangely at 1.085 which means that you are paying at 8.5% premium which is actually a lot. Gearing is at 45.8% which is high and its credit rating is below investment grade.

I believe that Viva Industrial Trust, as one of the smallest REIT in the market, actually has the advantage of creating large impact to their portfolio with modest purchase of properties. This is a growing REIT and when it grew to a size like AIMSAMP, the yield will be compressed to about 7.5% which AIMSAMP is currently trading at. Thus, the potential is high.

I am looking at re-investing into Viva Industrial Trust this week with the current monies that I have.

Friday, April 24, 2015

Ai Ya... I believe I was wrong in selling half of my holdings...

Ai ya! When I was thinking of the interest rates rise, I predicted that the market will fall. Therefore, I sold half of my holdings specially AIMSAMP and Viva Industrial Trust. Now I see that both have risen by a lot and I earned $2,500 less.

With Viva Industrial Trust presenting a stellar results, giving more than 9% yield (which was my prediction), I regret my decision to sell at such an early date. There was one reader who mention that he does not sell and does dollar cost averaging. Well, I ride though some of the worst scenarios and this one is probably not going to be the worst. Another reader mention that it is already priced in and I think he is right.

Well, it is a $2,500 lesson learnt for me. Expensive, and painful. And I am still sitting on $60,000 cash waiting to see which one to buy. I am just glad that I did not sell my anchor investment aka GlobalInv thus I still manage to enjoy a $4,000 appreciation.

Thursday, April 23, 2015

Analysis of Global Investment Limited

Current Price on 16th Apr 2015 = $0.148
  • Yield = 10.14%  
  • Price-to-book Ratio = 0.69
  • Assets per unit = $0.216
  • Debt per unit = $0.001 (including current liabilities)
  • Gearing = 0.5%
  • Secured NAV = $0.145 (97.8%)
Global Investment Limited has been racing ahead with an increase from $0.14 to $0.148. This run means my investment has appreciated by $4,800 which is a fantastic bonus to me.

With the current pricing, let's look at the statistics. Yield is still at a favourable 10.14% and price-to-book ratio is at 0.69 which means I am still buying at 30% discount. However, the secured NAV (my estimate) is currently at 97.8%. Still good but no longer as attractive.

I should have noticed that at $0.14, the price is good to enter. Just that currently I am already holding on to almost 600,000 shares worth close to $90,000 and that hinders me from entering more. I think I should just be glad that I have ride on the wave and it appreciated then to think of whether I have invested more in this. With some cash on hand, I am looking at other counters to diversify (slightly) of my holdings.

Monday, April 20, 2015

Analysis of Accordia Trust

Current Price on 16th Apr 2015 = $0.78
  • Yield = 10.06%  
  • Price-to-book Ratio = 0.89
  • Assets per unit = $1.915
  • Debt per unit = $1.033 (including current liabilities)
  • Gearing = 54.0%
Accordia Golf Trust recently caught my attention more because it is a Japan REIT which offers high yield. Here are the reasons.

It went down recently because of the falling Yen which depress its market value and its yield. However, recently it has stabilized and it looks like Singapore is also looking at easing our currency (although not now) to make sure that our economy is competitive. Thus, I am predicting that the S$/Yen will stabilized. It has stabilized at 87 Yen.

Thus, I used this data to calculate its yield, assets and debt per unit so that I have a good gauge of the overall NAV. I found that it is trading at 11% discount with a high yield of 10.06%. Even after this distribution, it will be almost 8% which to me is still favourable.

As I have $60,000 cash on hand currently and I will be considering this counter seriously together with LippoMall Retail Trust and GlobalInv to place my monies for yield.

Thursday, April 2, 2015

Analysis of IREIT Global

Current Price on 27th Mar 2015 = $0.78
  • Yield = 8.57%  
  • Price-to-book Ratio = 1.095
  • Assets per unit = $1.091
  • Debt per unit = $0.378 (including current liabilities)
  • Gearing = 34.7%
Recently, I have been asked about IREIT Global which I have a lot from its IPO. The price has fallen by a lot since its IPO and their statistics seems favourable now.

8.57% yield is probably one of the highest in the market. Bear in mind that we still need to adjust to the falling Euro so I am not optimistic about it (even though they have hedge it). I made the adjustments on the assets and debts and found that the price-to-book ratio is at 1.095. It means we are paying 10% premium. I think it is still too high.

Although the yield is 8.57%, I am not keen until the situation of Euro stabilizes.

Monday, March 30, 2015

Analysis of OUE Commercial Trust

Current Price on 27th Mar 2015 = $0.80
  • Yield = 7.25%  
  • Price-to-book Ratio = 0.724
  • Assets per unit = $1.97
  • Debt per unit = $0.829 (including current liabilities)
  • Gearing = 43.0%
With $60,000 cash from the proceeds of all those sales that I have made, I am on the lookout for more investment opportunities. OUE Commercial Trust is one of those which I am considering.

One key attraction is the price-to-book ratio which is currently at 0.724. It is probably the lowest in the market with significant proportion of properties in Singapore. 70% of its portfolio is in Singapore while 30% is in China. Thus, I will proportion it to be S$0.77 in Singapore and S$0.33 in China. One key issue is that the Lippo Plaza has a remaining lease of 29 years which is very short. It means that the depreciation of its China asset will be faster compared to its Singapore properties which has an average lease of about 80 years (with exception of OUE Link).

Still I think that with the current trading price of $0.80, I am getting it at a steep discount even if I gave steep discount to NAV of Lippo Plaza. Moreover, they are still generating cashflow for us for 29 years so I thought it is still good for me.

In my investment criteria, I have a criteria of at least 8% yield which OUE Commercial Trust does not qualify. However, in view of its price-to-book ratio, I think it should be worth the risk and lower yield. I remember Suntec REIT was trading at a steep discount as well and it appreciated to match its peers. I hope OUE Commercial Trust will do the same.

Of course, with the current investment climate, we need to think whether we should hold cash as well.