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, July 25, 2014

IPO Analysis of Accordia Golf Trust

IPO Price on 24th July 2014 = $1.00
  • Yield = 7.00% (9.10% for the first year)
  • Price-to-book Ratio = 1.086
  • Assets per unit = $1.920
  • Debt per unit = $0.999 (including current liabilities)
  • Gearing = 52.0%

Accordia Golf Trust sprang a surprise IPO for Singapore investors which really caught me. I don't have a chance to analyse it and decide whether I should apply for it. Nevertheless, here is the statistics.

With 9.10% in the first year and 7.00% onwards, it looks attractive on the first year but subsequently, I don't think so. Secondly, it has an extremely high gearing of 52.0% which actually mirrors Croesus Retail Trust. I think they are taking advantage of the cheap loans and money printing to raise their leverage. This one, I need to check again.

Much depends on the final price of the IPO (between $0.97 to $1.00) to guess the opening price and subsequent pricing. If it is below $1.00 which is the top end, I don't think it will move up further. If it is priced at the bottom end of $0.97, get ready for it to drop further. Anything between, price will stay.

Even if I have the chance, I won't take it.

1 comment:

  1. You're right to be skeptical on the yield. Based on my own analysis on S-REITs that reported first year results, the actual yield is often lower than stated in the IPO prospectus.