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, January 25, 2016

Analysis of Fortune REIT

Current Price on 20th Jan 2015 = HK$7.79
  • Yield = 6.14%  
  • Price-to-book Ratio = 0.61
  • Assets per unit = HK$19.43
  • Debt per unit = HK$6.671 (including current liabilities)
  • Gearing = 34.3%
Fortune REIT publish their results recently which I thought was quite favourable. Let's look at the statistics.

Yield is at a modest 6.14% which is hardly exciting but their price-to-book ratio is 0.61 which means we are buying at almost 40% discount to NAV. Do note that they have been trading below NAV since their launch. Gearing is at a healthy 34.3%.

As we move to focus on NAV than yield, this looks very attractive. Moreover, it is in HK dollars which is likely to appreciate against the Singapore dollar (since it is peg to the US dollar). Thus, if you are investing in this, you are also technically investing in US dollars which is also favourable to you. However, I don't expect anyone to launch a takeover bid on this REIT due to its size so their NAV may not be realized. What I can think about is their asset recycling strategy which will help to realize some of their NAV.

I am not vested in this as their yield is way too low.

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