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, July 17, 2012

Analysis of K-REIT Asia

Current Price on 17th July 2012 = $1.135
  • Current Yield = 6.84%  
  • Price-to-book Ratio = 0.858
  • Assets per unit = $2.392
  • Debt per unit = $1.069 (including current liabilities)
  • Gearing = 44.7%
  • Secured NAV = $0.695 (61%)  
K-REIT Asia has reported its results yesterday which is not surprising to me. Yield went up by 2% compared to previous quarter which is good and I will be getting a handsome dividend of 3.84 cents which worked out to $614 for me.

What is surprising is the surge in its trading price which currently stands at $1.135 today. As the price goes up, its current yield will fall and now it is below 7% which to me is very low. Even its price-to-book ratio is now at 0.858 which is higher than CCT and FCOT. To me, it has become more like a growth REIT and I believe it is priced in already.

Looking at the developments in the current quarter, we are expecting increase in full quarter distribution from conversion of MBFC to a LLP which gives us a bit more money. And we are also expecting ORQPL to be converted as well. Apart from all these, with an occupancy at 97%, upside of its current distribution look limited. If they were to grow, it should be by acquisition and they will need to raise cash.

I am vested with 16,000 shares. And I think K-REIT Asia has served its purpose in delivering its results to suit my needs through both distribution and capital appreciation. I will need to think through seriously whether to offload this and look for REITs which fulfil my criteria. 

No comments:

Post a Comment