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 $3,300/month.

Monday, November 17, 2014

Analysis of Viva Industrial Trust

Current Price on 11th Nov 2014 = $0.795
  • Current Yield = 8.49%  
  • Price-to-book Ratio = 1.059
  • Asset Per Unit = $1.430
  • Liabilities per unit = $0.680
  • Gearing = 47.5%
Viva Industrial Trust has a few announcements which are important. The most important one is that they have announced their acquisition of two buildings which gives a 10.4% yield. For a small REIT like Viva Industrial Trust, this is a big acquisition. It will improve their yield to 9.49% which is very high, about 2% higher than the closest rival.

Their assets and liabilities went up as well, putting pressure on their gearing which is increased to 47.5%. Their price-to-book ratio still stands at an unattractive 1.059 which means we are paying 5.9% premium to their valuation. One more point to note is that their credit rating is BB+ which is not investment grade.

I remember AIMSAMP Industrial Trust was in this state as well with credit rating below investment grade. It took them a long time to achieve upgrade which substantially improves their trading price. For Viva Industrial Trust, I believe the same will happen. The question is whether you are willing to ride this journey with them.

9.49% from May 2015 onwards is very attractive (Considering that they will complete their purchase in Q4). I am thinking of switching half my holdings from AIMSAMP to Viva Industrial Trust.

2 comments:

  1. Hi jc, do you mind to share how we get the company's credit rating? Is it stated in their annual report?
    Thanks..

    ReplyDelete
    Replies
    1. Dear Mf Foong,

      Credit rating is stated in their annual report given by one of the Big Three credit rating companies.

      Happy investing.

      Delete