Welcome

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.

Wednesday, June 28, 2017

Netlink NBN Trust IPO - Looking more like a bond

IPO Price on 27th June 2017 = $0.93
  • Yield = 4.99% (2018)  
  • Price-to-book Ratio = 1.077
  • Assets per unit = $1.16
  • Debt per unit = $0.296 (including current liabilities)
  • Gearing = 25.6%
Netlink NBN Trust is launching its IPO next month which is long awaited for all Singaporeans. And I really hope that all Singaporeans have a chance to get something i.e. to share Singapore's assets. Let's take a look at the statistics first.

With a yield of 4.99%, it is hardly appealing. Probably one of the lowest yielding business trust that you can find in Singapore. Moreover, you are buying at a premium of 7.7% which is again hardly appealing. Gearing is low at 25.6% which is the only positive.

One positive is that this business is so stable that you won't be getting any lower.They are a monopoly in this business. But their pricing is regulated so they would have trouble growing their business even though they mention that they have a 5.50% growth which is really not sustainable.

Thus, I would think that it functions more like a perpetual securities (bonds with no maturity) where their price will move in a very narrow band (+- 5%) and giving out regular coupons. If we compare it with the bonds that are on the market now, it will seem one of the better ones. Only Hyflux or Aspial bonds are comparable.

If they are not pricing it at the top end of the range i.e. $0.93, it means that the demand is not high and the price will definitely not go beyond $0.93. If they priced it at the lowest end, i.e. $0.80, it means that there is really no demand and price will go lower than $0.80 and that will be disastrous for those who applied for its IPO. If I were to guess the pricing, I would prefer it to be $0.86 (their NAV price) or slightly lower.

I won't be applying for this because I know definitely I will have a chance to buy it at IPO price once it starts trading. 

Tuesday, June 20, 2017

Updating my Current Holdings

Hi everyone,

I have made some changes to my portfolio due to some adjustments to my life. Recently I bought a new car (and sold off my old one) so I have pulled out $24,000 from my investments to pay the first 30% of the car. I took a car loan for the rest in view that this money can be invested for better returns. Moreover, here is one movement that I have made.

Asian Pay Television Trust

While on vacation with my family, I bought APTT on the day of XD at $0.525 (50,000 shares) and $0.53 (50,000 shares) in view to use their dividends to pay off the interests of the car loan and the equity loan that I am taking to pay for my car. With this purchase, I currently has 200,000 shares which are currently valued at $113,000, providing me with $13,000 worth of dividends every year.

With all these changes, here is my current portfolio.


Therefore, this portfolio is providing me with $4,290 of passive income every month on average which can be used to pay my housing loan, my car loan with some to spare.

Monday, June 5, 2017

Analysis of Sabana REIT - Dust Settling down and a relook at fundamentals

Current Price on 3rd June 2017 = $0.425
  • Yield = 8.28%  
  • Price-to-book Ratio = 0.707
  • Assets per unit = $0.97
  • Debt per unit = $0.369 (including current liabilities)
  • Gearing = 38.1%
  • Secured NAV = $0.315 (74% of trading price)
Sabana REIT has been in the news for the right and wrong reasons. After the failure of the revolt by unitholders, price went down by quite a bit and managed to stabilize at $0.425ish. There are other announcements like cancellation of purchase of property which is good in some sense because it wasn't very yield-accretive in the first place. But the funds raised by rights issue will go to repayment of debt which somehow will stabilize the yield and also less likely to default. Thus, it is a good time to relook at the fundamentals.

At 8.28% yield, its yield is quite strong although not the best. Viva Industrial Trust and Soilbuild Business Space REIT are giving higher yield. What is attractive is the price-to-book value which is at 0.707. It means we are buying at 30% discount which is good. And this is much better than Viva Industrial Trust and Soilbuild Business Space REIT. Gearing is at a healthy 38.1% and its secured NAV gives some stability to the REIT.

I have initially sold most of my holdings at $0.465 which is before the EGM. Now with the REIT stabilizing at $0.425, I may just switch over my funds which are parked at OUE Commercial Trust to Sabana REIT to gain more yield.

Monday, May 22, 2017

Analysis of OUE Commercial Trust

Current Price on 10th May 2017 = $0.71
  • Yield = 6.17%  
  • Price-to-book Ratio = 0.829
  • Assets per unit = $2.245
  • Debt per unit = $1.388 (including current liabilities)
  • Gearing = 61.8%
OUE Commercial Trust has been in my portfolio for two years now with about 30,300 shares. It has generated two years of return and I am also sitting on a 10% capital gain. Let's take a look at the statistics.

With a yield of 6.17%, it is currently very low according to my criteria of 8%. But the good thing is that its price to book ratio is 0.829 which means I am buying at 17% discount even at current price. Gearing is at 61.8% because I have considered perpetual securities as loans instead of equities.

OUE Commercial Trust has served its purpose of helping me to diversify into Office REITs and their price has moved to a position where there is no reason for further improvement. I am looking at unloading this and looking for something else to put in.

Thursday, May 18, 2017

Analysis of Lippo-Malls Retail Trust - Fairly Valued

Current Price on 10th May 2017 = $0.415
  • Yield = 8.58%  
  • Price-to-book Ratio = 1.114
  • Assets per unit = $0.715
  • Debt per unit = $0.342 (including current liabilities)
  • Gearing = 47.9%
  • Occupancy = 93.8%
  • Secured NAV = $0.373 (86% of trading price)
LippoMalls Retail Trust has announced their results which is improving. However, their price went up by a lot as well so let's see how the statistics fare.

With a yield of 8.58%, it is now not the highest yielding REIT. There are others like Viva Industrial Trust and Soilbuild Business Space REIT which has higher yield. However, their price-to-book ratio is 1.114 which means we are buying at a 14% premium. This is not attractive at all. Gearing is at 47.9% with current liabilities and only unsecured debt. This means that their secured NAV is quite high at 86% of trading price. Still quite high but not as attractive as before. Please note that all assets are based in Indonesia.

Indonesia continues to grow at a moderate pace of 5% which I thought it was nice to be able to participate in their growth. This is probably the reason why it is priced high. But I think it is now fairly priced and it shouldn't be moving higher anymore. I will find chance to sell my current holdings.

Monday, May 15, 2017

Analysis of Accordia Golf Trust

Current Price on 28th Apr 2017 = $0.765
  • Yield = 8.26%  
  • Price-to-book Ratio = 0.756
  • Assets per unit = $2.20
  • Debt per unit = $1.188 (including current liabilities)
  • Gearing = 54.0%
Accordia Golf Trust is one of my anchor investments with high yield at very low discount to NAV when I purchased 100,000 shares at $0.63. It has since risen to this price which I am enjoying a paper gain. Let's take a look at the statistics again.

With a yield of 8.26%, it is still attractive although it is close to my minimum of 8%. Their price to book ratio is 0.756 which means we are still buying at 25% discount to NAV which seems very attractive. Their gearing is quite high though at 54% although not all of them are loans.

One of the issues is that they are all in Japan and we are exposed to currency fluctuations between Singdollar and Japanese Yen. So that is another risk that we would have to take if we invest in it. Well, I am taking the risk.

With this as an anchor investment, it is always on my radar but I won't be adding more as of now.

Friday, May 5, 2017

Analysis of Far East Hospitality Trust

Current Price on 28th Apr 2017 = $0.60
  • Yield = 7.47%  
  • Price-to-book Ratio = 0.646
  • Assets per unit = $1.394
  • Debt per unit = $0.465 (including current liabilities)
  • Gearing = 33.4%
  • Secured NAV = $0.929 (154% of trading price)
Far East Hospitality Trust has been on my radar these days and I have recently purchased 100,000 shares at $0.61. These are the reasons for me to do my purchase.

Yield is at 7.47% which is quite modest and not really up to my target of at least 8% but there are not many on the market in the first place. However, what it attracts me is the deep discount to NAV that it is trading at. It is trading at 35% discount which means we are buying hotels and serviced residences at such a cheap price. Moreover, their debts are all unsecured which means the secured NAV is at 154% of their trading price which is extremely attractive. Gearing is at healthy 33.4%.

With such deep discount and recent events which helps REITs to realize their NAV in the positive way i.e. Saizen REIT which is successful and Sabana REIT which is in the process. Discount to NAV seems to take over precedence over yield now. Their peers are also trading at a discount but not as much as Far East. So this is one main reason why I purchase them.

Will continue to look at it closely and enjoy the dividends that they are giving us. :-)