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 $1,160/month.

S-REIT News

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Monday, January 26, 2015

Analysis of Fraser Commercial Trust

Current Price on 23th Jan 2015 = $1.51
  • Yield = 6.52%  
  • Price-to-book Ratio = 0.952
  • Assets per unit = $2.732
  • Debt per unit = $1.146 (including current liabilities)
  • Gearing = 41.9%
  • Secured NAV = $1.586 (105% of trading price)
I remember that I was once an investor in Fraser Commercial Trust and it has yield me great returns over the years before I finally sold it in 2013 (I think). To revisit it again is just like looking for an old friend. Anyway, they reported their results which is outstanding as they increase their DPU by 20%. Even if it is compared to the last quarter, it is still an improvement of about 10%.

With yield at 6.52%, it is quite comparable to Keppel REIT. However, their price-to-book ratio is 0.952. Keppel REIT is lower at this point. One more difference is that its secured NAV is 105% of its trading price as all their debts are unsecured and this is attractive because the margin of safety is much higher. Gearing is higher at 41.9% though.

To compare Keppel REIT with FCOT is not easy. One holds top grade assets while FCOT holds relative good properties. With similar profile, it is very difficult to decide which one is better. For me, I look at stats only and I will choose FCOT as my choice if I were to buy office REITs. 

Thursday, January 22, 2015

Analysis of SoilBuild Business Space REIT

Current Price on 8th Jan 2015 = $0.785
  • Yield = 7.88%  
  • Price-to-book Ratio = 0.971
  • Assets per unit = $1.311
  • Debt per unit = $0.503 (including current liabilities)
  • Gearing = 38.3%
SoilBuild Business Space REIT is one REIT which I have neglected posting ever since its IPO. Its price has been relative stable and they have been faithfully distributing dividends. With this trading price, here are the statistics.

Yield is at 7.88% which is at a high compared to other REITs. Quite rare would you get something which is close to 8%. However, they are priced at only 3% discount. Compared to Sabana REIT, it is not as attractive. Moreover, it does not have any secured NAV which increasingly many REITs are highlighting in their reports.

Soilbuild Business Space REIT vies with Viva Industrial Trust, AIMSAMP Industrial Trust and Sabana REIT for the same pool of investors. And their statistics are not very fantastic if you compare to its competitors. Yield is close to average while NAV is not attractive. I will still consider other REITs first.

Monday, January 19, 2015

Analysis of Cambridge Industrial Trust

Current Price on 16th Jan 2015 = $0.685
  • Yield = 7.31%  
  • Price-to-book Ratio = 0.968
  • Assets per unit = $1.128
  • Debt per unit = $0.420 (including current liabilities)
  • Gearing = 37.2%
  • Secured NAV = $0.186 (27% of trading value)
Cambridge Industrial Trust just reported its results recently which they have continued to maintain their performance. Here are the statistics.

Yield is at a modest 7.31% which is slightly lower than most industrial REITs. Price-to-book ratio is maintained at 0.968 which is good because it is trading at a discount to NAV. Gearing is healthy and there is a secured NAV of 27% of its trading value. This means that $0.186 is secured in the worst case scenario. Not the best in the market though.

Cambridge was the first REIT that I bought when I first started investing and held on to it for the longest period which is about 5 years. I sold all my holdings sometime in 2013 as I needed the cash for something else. Today as I look at the statistics, I think there are better ones out there with higher yield and safer margin of safety like AIMSAMP Industrial REIT, and SoilBuild REIT. I am still grateful for the dividends and capital appreciation that Cambridge has given me earlier.

Thursday, January 15, 2015

Analysis of Sabana REIT

Current Price on 8th Jan 2015 = $0.92
  • Yield = 7.87%  
  • Price-to-book Ratio = 0.84
  • Assets per unit = $1.87
  • Debt per unit = $0.774 (including current liabilities)
  • Secured NAV = $0.257 (28% of trading price)
Sabana REIT has been dropping in its trading price to the current price of only $0.92. I suspect they have issues with occupancy which has been decreasing quite drastically. With this trading price, here are the statistics.

Yield is at 7.87% which is still at a high compared to other REITs, considering that they are only 91% occupied. Moreover, they are priced at a 16% discount which I think is reflecting on the situation that they are in. But valuation, to me, should still be trusted as they are revalued every year. Imagine someone giving you a 16% discount to buy a property.

Sabana REIT has increasing become a strong competitor for my investments along with Viva Industrial Trust and AIMSAMP Industrial Trust with high yields. Of course, Viva Industrial Trust have a forward yield of more than 9% in my earlier post so I am keeping that. AIMSAMP Industrial Trust seems to be losing flavour as Sabana REIT beats them both in yield and in Price-to-Book ratio. The question now is only whether the transaction cost is worth the switch.

Monday, January 12, 2015

Analysis of LippoMalls Trust

Current Price on 8th Jan 2015 = $0.345
  • Yield = 8.00%  
  • Price-to-book Ratio = 0.84
  • Assets per unit = $0.799
  • Debt per unit = $0.388 (including current liabilities)
  • Secured NAV = $0.357 (103% of trading price)
LippoMalls Trust recently went on a yoyo which I have to admit that I missed the fantastic opportunity. It went down to $0.315 (I actually notice it and was considering about it) and went back up at $0.345 again. Haiz. I should have been bold and trust my instinct more.

With the current price at $0.345, it is still attractively priced at 8.00% yield with a 16% discount to NAV. Moreover, its secured NAV is $0.357 which is 103% of trading price. This means that in the worst case scenario, you still get $0.357. 

This year, I am in the process of rebuilding my cash reserve so unless that is a real opportunity like the one earlier, I don't think I am purchasing any investments. Another way is portfolio restructuring to create more value. Currently, I am holding on to AIMSAMP Industrial Trust which I think is quite fully valued already. It still gives me a good return but if there is one attractive opportunity, I will sell and buy (possibly LMIR)

Friday, January 9, 2015

Books that I read which influences me - Rich Dad, Poor Dad

I will be introducing some books which I have read and it influences me to my current investment philosophy. So this is the first book which I believe quite a number of you have read. Rich Dad Poor Dad.

Rich Dad, Poor Dad taught me about (1) passive and (2) recurring income. Firstly, it has to be passive i.e. you don't have to work hard for money. Even though I still have a day job (my wife is working too.) which is able to feed my family, it is a dream to have recurring income which is able to supplement my household expenses. Some of you may ask whether I am going to business. Honestly, I don't think I am ready for that yet. But at least I am able to invest and generate a steady stream of income from here. However, it needs a large sum of capital.

If you have not read it, it is a good book to start to get you thinking and be passionate about taking control of your financial security. If you wish to buy this book from Amazon, the link can be found in the sidebar.