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.

Monday, August 31, 2015

Analysis of Sabana REIT - A game of patience (waiting for it to grow back)

Current Price on 3oth Aug 2015 = $0.785
  • Yield = 9.17%  
  • Price-to-book Ratio = 0.739
  • Assets per unit = $1.762
  • Debt per unit = $0.700 (including current liabilities)
  • Gearing = 39.7%
  • Secured NAV = $0.456 (58.4% of trading price)
  • Credit Rating = Baa3
I have readers on facebook who ask me which are the recommended stocks after the meltdown. (http://www.facebook.com/sreitinvestmentblog). Well, here is one which I thought was a good one (if not a great one)

Yield is at one of the highest at 9.17%. There are some better ones like Global Investment Limited, IREIT Global, Accordia Golf Trust which are mainly overseas, or Viva Industrial Trust which is pretty much similar to Sabana REIT and it is local. However, one attractive point is their price-to-book ratio which is at 0.739. It means that we are buying an asset at 26% discount. Where do we get a property where they are so willing to sell at a discount? Gearing is at a healthy 39.7% which is quite standard and its credit rating is investment-grade.

I know that they are struggling with occupancy I believed is already priced-in. Moreover, after pricing in, we are still getting 9.17% yield which is very high. Imagine when the economy grows (better) again and occupancy went up, there is room for it to grow to 10% yield without acquisition or asset enhancement. Of course, you have to be patient, without knowing how long you need to wait.

I am only vested with 1,000 shares which I got at IPO. It seems that everytime I considered this, there will be something better. Cambridge Industrial Trust was one of my anchor investment until I sold it in 2013 (I think). AIMS AMP Industrial Trust was also one of my anchor investment until I sold it early this year. And now one of my anchor investment is Viva Industrial Trust. But it doesn't mean that this is not good. In fact, I think this is worthwhile considering to diversify (for my portfolio)

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