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.

Tuesday, February 13, 2018

Analysis of Sabana REIT - Depressed Price.

Current Price on 8th Feb 2018 = $0.395
  • Yield = 8.51%  
  • Price-to-book Ratio = 0.718
  • Assets per unit = $0.917
  • Debt per unit = $0.374 (including current liabilities)
  • Gearing = 40.8%
  • Secured NAV = $0.255 (69% of trading price)
Sabana REIT has recently delivered a set of results which I thought was a small improvement from previous quarters. Moreover, the recent sell-down gives us an opportunity to enter. Let's take a look at the statistics.

Despite the recent reports about weak management, their yield is currently at 8.51% which is very high compared to other REITs. Moreover, the price-to-book ratio is at 0.718 which means we are buying at close to 30% discount. Gearing is at 40.8% which is close to 45%.

Discount-to-NAV has featured strongly recently in my analysis because it provides a lot of margin to safety aka it won't drop as much and it will eventually rise. With a 30% discount and all properties based in Singapore, I believe this is a rare opportunity.

Although there are a lot of negativity about this REIT, I believed that it has been priced in. With high yield and trading at a discount to NAV, I believe this is a time to buy. The question is whether we have the ability to hold until it recovers.

Friday, February 9, 2018

Analysis of Ascendas Hospitality Trust

Current Price on 8th Feb 2018 = $0.86
  • Yield = 6.21%  
  • Price-to-book Ratio = 0.894
  • Assets per unit = $1.564
  • Debt per unit = $0.602 (including current liabilities and perpetual securities)
  • Gearing = 38.5%
Ascendas Hospitality Trust released both its results and their sale of China properties at a premium which are both good news. Moreover, the recent correction has given a chance to enter. But let's take a look at the statistics first.

Current yield is at 6.21% which is quite good among the hospitality trusts but low compared to other REITs. Their price-to-book ratio is 0.894 which means we are buying at 10% discount, taking into account the sale of the properties in China. Gearing is at a healthy 38.5%.

I am vested in Far East Hospitality Trust and their yield is getting very low due to recent surge in price. However, I don't think the price is attractive enough to make the switch. Will monitor closely on this once-loved trust.

Friday, January 19, 2018

Analysis of Far East Hospitality Trust - Acquisition in progress

Current Price on 15th Jan 2018 = $0.715
  • Yield = 5.76%  
  • Price-to-book Ratio = 0.797
  • Assets per unit = $1.463
  • Debt per unit = $0.566 (including current liabilities and perpetual securities)
  • Gearing = 38.7%
Far East Hospitality Trust has announced an acquisition which by analysts, is a good move because it looks cheap. Moreover, the deal is yield accretive although it is almost entirely debt financed. Let's take a look at the statistics.

With the yield at 5.76%, it is very low. However, it will increase to 5.9% following the acquisition. 5.76% is quite the average compared to other hospitality trusts but 5.9% will be on the high side. Nevertheless, it is very low compared to other REITs. What is good is that we are buying at 20% discount which is fantastic. Others are trading at 10% discount. However, I am not sure whether they will eventually trade at that level.

I am holding on to about 103,000 shares worth $73,000 because of their NAV. Once the price goes higher, I will be more keen to sell.

Tuesday, January 9, 2018

Analysis of ESR REIT - Aggressive Sponsor and Management on board

Current Price on 1st Jan 2018 = $0.565
  • Yield = 7.26%  
  • Price-to-book Ratio = 0.886
  • Assets per unit = $1.26
  • Debt per unit = $0.622 (including current liabilities and perpetual securities)
  • Gearing = 49.4%
  • Occupancy = 91%
ESR REIT has been aggressive in acquiring new properties and also selling properties to enhance the value of the REIT. Let's take a look at the statistics.

With the current price, we are buying at 7.26% yield but with the inclusion of the recent two acquisition, we may be looking at 9% yield which is higher than Sabana REIT and Viva Industrial Trust. If it really materialize, then this is probably one of the best REITs around. Moreover, its price-to-book ratio is at 0.886 which means we are buying at 12% discount to NAV which is still good for us.

I was wondering why the price has not gone up and probably is because there may be a rights issue coming up which sort of depressed the share price. I see this as an opportunity and probably will be making my move to increase my share holdings. I am currently holding on to 56,000 shares.

Friday, January 5, 2018

Analysis of LippoMall Retail Trust - Indonesian REIT trading at a premium

Current Price on 1st Jan 2018 = $0.40
  • Yield = 8.60%  
  • Price-to-book Ratio = 1.132
  • Assets per unit = $0.717
  • Debt per unit = $0.364 (including current liabilities)
  • Gearing = 50.7%
  • Occupancy = 93.8%
Last month, LippoMalls Indonesian Retail Trust went down from $0.43 to $0.39 because of a report that their credit rating might drop to junk status which affected confidence of investors. Let's see the statistics.

Yield is at 8.60% which is currently ranked only behind Asian Pay Television Trust (but bear in mind that APTT is a business trust). However, their valuation is also quite low so price-to-book ratio is at 1.132 which means we are buying at 13% premium to their valuation. Gearing, if you include perpetual securities apart from debt, is quite high at 50.7%. Occupancy is at 93.8% which is pretty healthy.

A question to ask is that their properties is in Indonesia so whether does it have the stigma that it is not in Singapore or other developed countries and it is more risky? Because the trading price does not show. An opportunity to invest in Indonesia legally and earning a good return. Having said that its price-to-book ratio may well be not justified and probably I should have switch to another counter before the collaspe. Even at today's pricing, it looks quite fairly valued and probably why it can trade at a premium is that their yield is still high and holding well.

I am vested with 30,000 shares, and I am observing whether I should unload and switch to another counter.

Tuesday, January 2, 2018

Analysis of Viva Industrial Trust - Price is too high?

Current Price on 1st Jan 2018 = $0.935
  • Yield = 8.13%  
  • Price-to-book Ratio = 1.184
  • Assets per unit = $1.37
  • Debt per unit = $0.58 (including current liabilities)
  • Gearing = 42.3%
  • Occupancy = 89.8%
I chose to analyze one of my oldies in my portfolio which is Viva Industrial Trust. Just realize that I have not been writing about them since May last year although I have been monitoring. Well, it is a good time to look at it again since the price went up so high and to be frank, I lost a chance to sell it at $0.99

Yield is at 8.13% which is quite high among the REITs currently. However, their valuation is very low and thus, their price-to-book ratio is at 1.184 which means we are buying at 18% premium which is a red flag. Gearing is at 42% which is still quite high.

I am vested with 87,100 shares and have been enjoying the dividends since 2015. However, I am beginning to feel the uneasyness holding on to properties at such a high premium. I am not sure whether I shall continue to hold, and will be looking at counters with better metrics.

Looking at ESR REIT, LMIR, Dasin Retail Trust and Asian Pay Television Trust