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.

Saturday, February 25, 2012

Analysis of CapitaCommercial Trust (New Acquisition)

Current Price on 23rd Feb 2012 = $1.18
  • Current Yield = 6.78%
  • Price-to-book Ratio = 0.733
  • Assets per unit = $2.388
  • Debt per unit = $0.788
  • Gearing = 32.6% 
  • Secured NAV = $1.425 (121%)
CapitaCommercial Trust recently has announced a new acquisition using its cash and little bank borrowings. This is definitely yield-accretive and the property will be unencumbered. Moreover, there is room for upside in rent. Therefore it is a good news.

CapitaCommercial Trust has always been trading at a lower yield compared to its peers like K-REIT Asia, FCOT and Suntec REIT. I believe this is due to the strong capital management of the team which currently maintains a secured NAV of $1.425 which is 121% of its trading price. This ensures that the risk involved is much lower than the others. By the way, CCT has the highest secured NAV in the market.

I do admire CCT as a REIT but I am also concerned about the level of yield that I am getting in my portfolio. This will be a good candidate if I intend to lower the risk level of my portfolio. I am continue to monitor this and see whether it is necessary for me to buy this REIT.

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