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 $4,200/month.

Thursday, May 29, 2014

Analysis of Viva Industrial Trust

Current Price on 21st May 2014 = $0.785
  • Current Yield = 8.77%  
  • Price-to-book Ratio = 1.034
  • Assets per unit = $1.298
  • Debt per unit = $0.538 (including current liabilities)
  • Gearing = 41.5%

Viva Industrial Trust has also reported their results which shows favourable data althought it is still not good enough.

Current yield is at a high of 8.77% inclusive of rental support. With current occupancy at 76%, they are working very hard to get people in and increase its occupancy. My estimate is that once it goes above 90%, they won't need rental support anymore.

Price-to-book ratio is at a modest 1.034 which means that we are buying at a 3.4% premium. Not very fantastic considering that some are trading at a discount to NAV. Gearing is also at a high of 41.5%

If I were to buy, it will be because of its high yield which is not easily found in S-REITs. I will consider seriously whether to switch some of my holdings to this.

5 comments:

  1. hi, do you have a basic guide on how or where to buy reits, etc? thank you!

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    Replies
    1. Hi heretiquely,

      Unfortunately, I do not have one yet. And I think it is a good idea. Will be working on it soon.

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  2. Hi jc.education, I appreciate your demand for high yield and low gearing. As a measurement, what do you think if we divide yield by gearing to arrive at a 'gearing-adjusted yield' i.e. risk-adjusted return? Thank you in advance.

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    Replies
    1. Hi Mr Soh,

      This is a very interesting idea. Haven't think about it before. Will be looking at it. Thanks!

      Delete
    2. Hi jc.education, you are welcome. Looking forward to your input. On the surface, the theory is sound. Please keep me updated.

      Delete