- Yield = 9.02%
- Price-to-book Ratio = 0.744
- Assets per unit = $1.748
- Debt per unit = $0.693 (including current liabilities)
- Gearing = 39.7%
Yield is currently at 9.02% (DPU drop by a little) which to me is excellent. Their price-to-book ratio is at 0.744 which means we are buying properties at about 25% discount. Well, some of the properties remain empty (about 10%) so that contributes to the discount. Gearing is at a safe 39.7%.
In the report, they are still negotiating the renewal of 8 of the 10 master lease while the other two will become multi-tenanted. Multi-tenanted to us means that occupancy will drop by about 20% but that is only for two properties. The other eight, I am not sure whether they will be successful in negotiating as if they fail, the impact is to one-third of the total portfolio.
I have made an estimation that in the event all become multi-tenanted, yield should drop by 10% to 15%, which gives us a yield of 7.67% to 8.12%. And this is the trading yield for other industrial REIT. Ascendas REIT is trading at 6.46%, Cambridge Industrial Trust is trading at 7.84%. Soilbuild REIT is trading at about 7.83%. So with that, one of the strategy is to buy Sabana REIT in the hope that they succeed. If they succeed and the market recognize it, yield should be compressed to about 8%. If it fails, I don't think price will continue to drop.
I am holding on to a lot from IPO (so long ago). And I am considering whether to execute this strategy of mine. It is going to be long and the full effects should only come in half a year's time. Still thinking.
They have been doing a very bad job in renewing master leasesReplyDelete
Exactly. I was enticed by the yield when i when in a few years back. Lesson learnt 1) yield is higher for a reason 2) even if its meant for buy and hold , underlying share price holds the key to whether an investment is good or badReplyDelete
The latest result is terrible+horrible. It all boils down to the lousy management which lots of people ignored when evaluating sabana reitReplyDelete
Use this article to increase your knowledge . cara menggugurkan kandunganReplyDelete