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 $1,250/month.

S-REIT News

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Friday, July 3, 2015

Rights Issue of IREIT Global

Current Price on 30th June 2015 = $0.80
  • Yield = 8.36% 
  • Price-to-book Ratio = 1.115 
  • Assets per unit = $1.098
  • Debt per unit = $0.381 (including current liabilities)
  • Gearing = 34.7%
IREIT Global has announced their first acquisition which is quite major compared to its size. They have also announced their Right issue to finance their purchase at 45 for 100 at $0.468 per share. And before this, they have obtain a credit rating which is "BB". Here are the statistics after Rights issue.

Price after Rights = $0.70
  • Yield = 9.55% (After Rights Issue)  
  • Price-to-book Ratio = 1.201 (After Rights Issue)
  • Assets per unit = $1.071
  • Debt per unit = $0.489 (including current liabilities)
  • Gearing = 45.6%
Firstly, Assets per unit has decreased instead from $1.098 to $1.071. Debts have increased from $0.381 to $0.489. Thus, the gearing is now 45.6% instead of 34.7% which substantially increase their risk profile. Their price-to-book ratio is at 1.201 which means we are buying at 20% premium. The only good thing that happen is that the yield is now currently at an attractive rate of 9.55%. Only Viva Industrial Trust can match it.

I have 1,000 shares from IPO which I have been holding till now. I will still participate in the Right issue and also apply for excess Rights since they are pricing at a discount. Well, as long as I am allocated excess rights, I will benefit from this exercise.

Wednesday, July 1, 2015

Rights Issue of OUE Commercial Trust

Current Price on 30th June 2015 = $0.81 ($0.731 after Rights)
  • Yield = 7.11% (After Rights Issue - Assumed)  
  • Price-to-book Ratio = 0.800 (After Rights Issue)
  • Assets per unit = $2.238
  • Debt per unit = $1.324 (including current liabilities and CPPU)
  • Gearing = 59.1%
OUE Commercial Trust reported their financial plans on how to acquire One Raffles Place and also launch their Rights Issue. Here are my statistics after Rights Issue.

Although they have placed CPPU as equity, I have placed it as Debt to reflect the fact that they are paying interest on the units and CPPU holders are still not shareholders who enjoy dividends. Thus, the gearing looks bad at 59.1%. Thus, the price-to-book ratio at this moment still stays at 0.800 which means we are still buying at a 20% discount. There was no info on the projected yield so I am assuming that it stays the same.

Because of the price-to-book ratio and the fact that yield is better than most office REITs, I manage to buy 5,000 shares of OUE C-Trust today at a price of $0.81. This is because I would like to participate in the Rights issue and apply for excess rights issue in hope that they will give me some more. (By the way, last day of "cum rights" is 2nd July)

Monday, June 29, 2015

Analysis of Ascendas REIT - Baseline expectations for all industrial REITs

Current Price on 26th June 2015 = $2.45
  • Yield = 6.06%  
  • Price-to-book Ratio = 1.154
  • Assets per unit = $3.391
  • Debt per unit = $1.267 (including current liabilities)
  • Gearing = 37.4%
It has been a while since I look at these big REITs counter and this is once which I will check on this one big REIT for a simple reason. I would like to see what are the benchmarks for big stable REITs which other REITs can strive to achieve.

Yield is at a low of 6.06% which is hardly exciting. It is below my expectation of 8%. Moreover, its price-to-book ratio is 1.154 which does not fit my criteria of buying at discount to NAV. Gearing at a respectable 37.4%. Using my criteria, it hit almost none of it.

However, I would like to see it as a benchmark which other REITs can achieve. Imagine AIMSAMP REIT, Viva Industrial Trust, Cambridge Industrial REIT and others can grow their portfolio into something like Ascendas. For AIMSAMP REIT to be like Ascendas, their price have to go up from $1.50 to $1.90. How about others then? Hmmm...

Is it possible for the price to go up so high that their yield are compressed to 6.06%? Well, it is possible if their management and their scale can match Ascendas. It may take a few years for them to work on it, enduring some financial storms along the way. But we are long-term investors here. If we see the potential, why not just enter the smaller REITs and wait for them to grow? They tend to be priced cheaper by the market anyway.

There are other Industrial REITs to look at as well before this kind of analysis is completed. But Ascendas is a good proxy of what the rest can do in the near future.

Thursday, June 18, 2015

http://www.theedgemarkets.com/sg/article/manulife-begins-pre-marketing-ipo-us-reit-reports?type=Markets

http://www.theedgemarkets.com/sg/article/manulife-begins-pre-marketing-ipo-us-reit-reports?type=Markets



Manulife began their Pre-IPO roadshow which is good news for Singapore market. Here are some of the data.



Two data at this point: Price-to-book ratio of 1.1 to 1.2 and dividend yield of 6%. With this data, I don't think it is attractive at all. I can find listed REITs with better ratios and yield.



Waiting for one more info. Their pre-IPO marketing results and see whether is it priced at the top or bottom of their indicative range.