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.

Tuesday, April 26, 2016

Analysis of Cache Logistics Trust

Current Price on 25th Apr 2015 = $0.89
  • Yield = 9.16%  
  • Price-to-book Ratio = 1.014
  • Assets per unit = $1.478
  • Debt per unit = $0.601 (including current liabilities)
  • Gearing = 40.6%
Cache Logistics Trust deserve some attention because it is currently the one with highest yield among the Industrial REIT. Let's take a look at the statistics.

With a yield of 9.16%, it is the one with highest yield among the industrial REIT, beating Viva Industrial Trust by a whisker. The rest are all below 9%. However, a strange thing is that its price-to-book ratio is 1.014 which means we are buying at a slight premium. This is unusual because most of the REITs are trading at a discount. Gearing is at 40.6% which is managable but not very safe.

I am shifting to put more weight to price-to-book ratio which helps me to manage my portfolio risk which at this point is more important. Thus, I won't enter if it is trading at a premium.

3 comments:

  1. JC,

    If the Assets per unit = $1.478 and the Current Price on 25th Apr 2015 = $0.89

    Price to Book should be $1.478 divided by $0.89 = 87.7% or have I miss understood it all together?

    ReplyDelete
    Replies
    1. Hi Winston,

      Price to Book Ratio is calculated by

      Current Price / (Assets-Liabilities)

      Delete
  2. Got it. Your Assets per unit include liabilities and not Net Assets.

    ReplyDelete