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 3, 2015

Rights Issue of IREIT Global

Current Price on 30th June 2015 = $0.80
  • Yield = 8.36% 
  • Price-to-book Ratio = 1.115 
  • Assets per unit = $1.098
  • Debt per unit = $0.381 (including current liabilities)
  • Gearing = 34.7%
IREIT Global has announced their first acquisition which is quite major compared to its size. They have also announced their Right issue to finance their purchase at 45 for 100 at $0.468 per share. And before this, they have obtain a credit rating which is "BB". Here are the statistics after Rights issue.

Price after Rights = $0.70
  • Yield = 9.55% (After Rights Issue)  
  • Price-to-book Ratio = 1.201 (After Rights Issue)
  • Assets per unit = $1.071
  • Debt per unit = $0.489 (including current liabilities)
  • Gearing = 45.6%
Firstly, Assets per unit has decreased instead from $1.098 to $1.071. Debts have increased from $0.381 to $0.489. Thus, the gearing is now 45.6% instead of 34.7% which substantially increase their risk profile. Their price-to-book ratio is at 1.201 which means we are buying at 20% premium. The only good thing that happen is that the yield is now currently at an attractive rate of 9.55%. Only Viva Industrial Trust can match it.

I have 1,000 shares from IPO which I have been holding till now. I will still participate in the Right issue and also apply for excess Rights since they are pricing at a discount. Well, as long as I am allocated excess rights, I will benefit from this exercise.

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