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 $3,800/month.

Monday, July 15, 2013

Analysis of SPH REIT (IPO)

IPO Price Between = $0.85 - $0.90
  • Current Yield = 5.58%  
  • Price-to-book Ratio = 1.009
  • Assets per unit = $1.246
  • Debt per unit = $0.354 (including current liabilities)
  • Gearing = 28.4%
  • Secured NAV = $0.228 (25%)
SPH REIT has lodged their preliminary prospectus with MAS. In their document, there is a lot of information which I have sieved out and compiled and here it is.

 Yield is at 5.58% which is quite comparable to its peers like Mapletree Commercial Trust, CapitaMall and Starhill Global REIT. It is a premium REIT which price-to-book ratio at 1.009. Gearing is healthy at 28.4% with a secured NAV of $0.228 (25%). Their loans are secured by Paragon so Clementi Mall is unencumbered.

 To me, its yield is very low, way below my target of 8%. Plus I am not really keen to buy a premium REIT meaning I am not willing to pay more for an asset.

 Nevertheless, I will wait for the final pricing and see whether it is priced at the top end. If it is priced at the top end, I will subscribe. Anything less than that, I will let this go.
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5 comments:

  1. BiaoJuly 15, 2013 at 9:04 AM

    Why only buy if its priced at top end? Wouldn't that means more expensive and less value?

    ReplyDelete
    Replies
    1. jc.education.sgJuly 15, 2013 at 8:38 PM

      It is a demand and supply curve. If there is no demand, they will be forced to lower the price so that people will buy. But it also mean that it is "fairly priced" and it won't appreciate.

      That was what happen to HPH Trust and Sabana REIT when they launch their IPO.

      Delete
    2. BiaoJuly 15, 2013 at 9:33 PM

      Thanks for sharing. I'm trying to learn investing. Your blog is useful!

      Delete
  2. jc.education.sgJuly 19, 2013 at 6:27 AM

    Hi readers,

    After reading about SPH REIT IPO, you may want to read OUE Hospitality Trust IPO as well. The link is here.

    http://www.s-reitinvestmentblog.blogspot.sg/2013/07/analysis-of-oue-hospitality-trust-ipo.html

    ReplyDelete
  3. HeliguyJuly 19, 2013 at 9:58 AM

    If it is priced at the top end, which it is now, you will buy in.. But does this mean it is better to sell off immediately (when there is 'high' demand) since it does not meet 8% yield?

    Thanks!

    ReplyDelete

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