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, December 22, 2014

Analysis of Far East Hospitality Trust

Current Price on 15th Dec 2014 = $0.82
  • Yield = 6.44%  
  • Price-to-book Ratio = 0.84
  • Assets per unit = $1.434
  • Debt per unit = $0.452 (including current liabilities)
  • Secured NAV = $0.976 (118% of trading price)
Recently, one reader asked me about Far East Hospitality Trust. I must admit that I forgot that there is such a counter. It can be confusing especially when there is Fraser Hospitality Trust which almost have the same acronym.

Looking at the statistics, it is very interesting. It has a fantastic price-to-book ratio of 0.84 which means that it is trading at a 16% discount. Moreover, all its debts are unsecured, giving a Secured NAV of $0.976 which is 18% higher than their trading price. As far as price-to-book ratio and secured NAV, this is the best among the hospitality trust, and probably one of the best among all the SREITs.

The only problem is its yield which is very low at 6.44%. Moreover, it reported a drop in its yield recently. In my opinion, they have the properties but it is not generating enough cashflow for its unitholder. Compared to CDL Hospitality Trust which is giving 6.05% but trading at 11.2% premium of its NAV, CDL is doing better.

However, it just shows how much potential that Far East Hospitality Trust has to improve themselves to match the rest and REITs usually are able to do so. To me, I will need more signs to show that they are on an improvement and growth path in its yield before investing in it.

2 comments:

  1. Hi,

    Do you know of any "brokerage" that provides the P/L% of your stock holdings inclusive of dividends collected?

    Thanks.

    ReplyDelete
    Replies
    1. Hi K,

      Missed your comments. I don't think any brokerage is offering this information at this point but there are google play apps that does that for us. :-)

      Delete