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, January 20, 2014

OUE Commercial REIT IPO - Analysis Reposted

OUE Commercial REIT has just launched their IPO for retail subscription. Here I will just repost my analysis which I have done last week for all of us here. By the way, I have applied for 11,000 shares through the public tranche. :-)

IPO Price = $0.80
  • Current Yield = 6.80%  
  • Price-to-book Ratio = 0.752
  • Assets per unit = $1.920
  • Debt per unit = $0.856 (including current liabilities)
  • Gearing = 44.6%

OUE is going to launch another REIT call OUE Commercial REIT. It comprises of two properties, one in Singapore and another in Shanghai. It has fixed their price at $0.80 which allows analysis to take place. Here are the statistics.


One very attractive component is its price-to-book ratio which is  at a low of 0.752. However, it is actually comparable to some of its peers like FCOT (0.788), and Suntec REIT (0.726). Its yield is also comparable to FCOT which is at 6.55%. Suntec REIT is at 5.95% but there is a potential upside for it. With such information and some of its comparables, I would say that it is fairly valued only.

They have cleverly priced it first unlike the previous issue where they have an indicative range and priced it later. Thus for us retail investors, it is difficult to gauge the demand. We will need to rely on news reports which may not really tell us the full story.

I am still considering whether to enter because my portfolio is in a need of rebalancing. It seems that I am likely to apply for it, looking at the statistics but it is not really a "must" because there are other comparables.

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