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 $3,300/month.

Monday, September 24, 2012

Purchase of Saizen REIT and Current Holdings

Last Friday, I made a purchase of 63,000 shares of Saizen REIT at a price of $0.162. After thinking through a few options, I am sticking to my investment criteria of at least 8% and at a discount to price-to-book value.

Saizen REIT offers a yield of 7.78% this year and a projected rate of 8.17% yield next year. Its price-to-book ratio is at 0.536 which is the lowest in the market. Moreover, it is recovering from its previous default and is now on a recovery/releveraging phase. With its credit rating moving up, I expect borrowing cost to reduce over these few years by amortizing their expensive loans and substitute with cheap ones, yield-accretive acquisitions etc. Moreover, they are executing their plans now which means we are benefiting from it sooner.

As 2012 draws to a close soon, I am using 2013 yield projection to analyse my investments. It has impacted my analysis of FCOT and K-REIT, both which has major reversion in their yields. So here are the statistics.
  • Current Market Value = $154,369 (Capital Appreciation of $38,000)
  • Distribution for 2013 = $11,215 ($930 per month) (Thanks! Promptpost!)
  • Market-to-NAV = 0.867
  • % Market Yield = 7.265%
  • % Secured NAV = 44.36%
It has been a long ride since I first researched on REITs, investing in it with a few thousand dollars that I have until now with a strong market valuation and significant distribution which supplements my family income. I hope you can do it too even if you have little money currently.

4 comments:

  1. Me never like the Japanese property market though. :) good luck !

    ReplyDelete
  2. Haha! It takes quite a lot of me to decide to buy though... But I believe it is stable enough and there is a lot of value in it.

    ReplyDelete
  3. on the Distribution, is $930 per year a typo? do you mean $930 per month?

    ReplyDelete
    Replies
    1. Hi promptpost,

      I do mean $930 per month which works out to about $11,000 per year...

      Delete