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, January 27, 2016

Analysis of Sabana REIT - Still in troubled times

Current Price on 26th Jan 2015 = $0.66
  • Yield = 9.09%  
  • Price-to-book Ratio = 0.742
  • Assets per unit = $1.583
  • Debt per unit = $0.696 (including current liabilities)
  • Gearing = 43.9%
Sabana REIT just published their results which is quite disappointing as their distribution drops but quite a lot (more than 10%). Moreover, their valuation also drops by 9% according to their reports, which is very unfavourable. Let's look at the statistics.

With the drop in yield and NAV, the price has dropped to $0.66 which gives a yield of 9.09% currently. However, they are in the midst of negotiating another three properties for master lease and one conversion, I believe yield will continue to drop. Assets per unit has dropped which means their price-to-book ratio has risen to 0.742. Still not too bad considering the valuation at current economic climate and it is the cheapest among the Industrial REITs. Gearing is at a high of 43.9%. Please note that I use all liabilities instead of just debt.

From the statistics, it look promising, with high yield and favourable price-to-book ratio. However, with the problems coming up, I don't see the yield going up anytime. In fact, I do see it going down further. The only positive thing is its small size, which makes it a possible target for take over. I am vested only with 1,000 shares so will see what happens. Maybe a white knight will come if they see value in this, hopefully.

3 comments:

  1. Hi Joseph,

    Thanks for posting your analysis. Quite interesting though I'm not vested.

    ReplyDelete
  2. No analysis on interest coverage, master leases conversion, asset disposal in the past year, negative rental revision (with Vibrant group), the industrial outlook in Singapore...

    ..Wish there was more to this post than the statistical obvious. It will give a clue as to why people are abandoning this stock

    ReplyDelete
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