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 $4,200/month.

Wednesday, October 28, 2015

Analysis of First REIT - My former darling which is no longer attractive

Current Price on 17th Oct 2015 = $1.345
  • Yield = 6.19%  
  • Price-to-book Ratio = 1.319
  • Assets per unit = $1.639
  • Debt per unit = $0.619 (including current liabilities)
  • Gearing = 37.8%
First REIT has published their results which in my opinion, is strong and resilient as all healthcare REITs are. The problem is the price which in my opinion is too high. Moreover, when the price is high, it is not resilient anymore.

Yield is at 6.19% which miss my 8% yield criteria by a lot. Price-to-book ratio is at 1.319 which means we are buying at 32% premium for this portfolio of properties. I don't know whether anyone is in the right mind to pay so much more for a property. Gearing is at 37.8% which is still healthy.

First REIT was my anchor investment many years back and they have helped me and my portfolio grow. Having said that, I believe that it is no longer attractive. With the yield and price-to-book ratio both not hitting my criteria (and way beyond), I believe that the price is no longer resilient and I am not going to invest in it.

7 comments:

  1. Hi, was wondering how you calculate the premium? i took 13.45/1.319 - 1 = 19.7%.
    could you enlighten me? -fan of your blog

    ReplyDelete
  2. Lippo ceo said will relist this one & LMIRT to Indonesia, what's your view & is it pro or con to existing retail shareholders?

    ReplyDelete
    Replies
    1. Hi iwimsasl,

      As the respective REITs have not officially receive the news, we might just have to wait for a while and see first.

      Delete
  3. Hi,
    FIRT is now at 1.17 SGD, wouldn't that make it a good investment?
    Do you know why the price is falling?

    ReplyDelete
    Replies
    1. Dear Djoh,

      It is because that there is a chance they will be transferred to Indonesia exchange where their risk-free rate is much higher.

      Delete
  4. This Reit is still in the Singapore Exchange. Does it still have a plan to be transferred? I checked their website but it was not mentioned. Do you think this is a good buy if I am just looking for a safe 5 to 6% return?

    ReplyDelete