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.

Friday, August 3, 2012

Analysis of Suntec REIT

Current Price on 29th July 2012 = $1.425
  • Current Yield = 6.63%
  • Price-to-book Ratio = 0.699
  • Assets per unit = $3.354  
  • Debt per unit = $1.315
  • Gearing = 39.2% 
  • Secured NAV = $1.143 (80%)
Suntec REIT's results caught my eye but I was too late to analyze it. The price went up by quite a bit already and it is no longer as attractive. Nevertheless, here is the analysis.

The drop in DPU presents a chance to enter as current unit holders are getting less. However, with the AEI of Suntec, and conversion of its two associates to Limited Liability Partnership which garner tax savings, things should be better. I am projecting an improvement of yield to 7.95% by 2014 which is quite attractive considering that it is predominantly an office REIT.

Its price-to-book ratio is worth a mention as it is now the cheapest REIT with properties based in Singapore (a safe and solid country) Moreover, its properties are of high quality in prime areas. This is a great chance to buy prime properties at discounted rates.

With the current climate where yields are getting lower and lower, I might just switch strategy to stock up REITs which are trading at a steep discount. Still pondering over it as I would need to analyze which one to sell first. (Likely K-REIT Asia as it is going to reach my threshold soon)


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