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, December 20, 2013

Analysis of Suntec REIT

Current Price on 15th Dec 2013 = $1.50
  • Current Yield = 6.10%  
  • Price-to-book Ratio = 0.707
  • Assets per unit = $3.499
  • Debt per unit = $1.377 (including current liabilities)
  • Gearing = 39.4%
  • Secured NAV = $1.457 (97%)

Suntec REIT has always been in my radar because of its price-to-book ratio which is currently at 0.707. It means that we are buying properties at 30% discount which is excellent. However, the yield is quite low at 6.10%. A recent report said that they have about $750 million loans to refinance in 2014 and that adds to the risk involved in it.

They recently made an acquisition which is favourable in the numbers. Coupled with the addition of value appreciation in Suntec City, here are the updated (estimated) info. 

  • Current Yield = 6.98%  
  • Price-to-book Ratio = 0.68
  • Assets per unit = $3.806
  • Debt per unit = $1.599 (including current liabilities)
  • Gearing = 42%
  • Secured NAV = $1.542 (102%)

The yield is higher at 6.98%, price-to-book ratio is stronger and its secured NAV is 102% of the current trading price. It means that even in the most distressed situation, we still own $1.542 worth of properties per unit. Moreover, I have confidence that they will be able to refinance their loans at favourable rates on getting unsecured loans.

If not for my current situation where I need cash, I will invest in Suntec REIT for long term.

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