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 $3,300/month.

Monday, June 27, 2016

Analysis of Sabana REIT

Current Price on 24th Jun 2016 = $0.545
  • Yield = 9.76%  
  • Price-to-book Ratio = 0.616
  • Assets per unit = $1.528
  • Debt per unit = $0.644 (including current liabilities)
  • Gearing = 42.1%
  • Secured NAV = $0.438 (80% of trading price)
Sabana REIT has recently made some unusual announcements i.e. withdrawing corporate rating after their downgrade to junk status of BB+. To me, it is unusual because corporate rating is able to showcase their investment potential. Therefore, to withdraw is very unusual. A drop in price because of this seems natural. Let's take a look at the statistics.

Yield is currently at 9.76% but there is a likely hood that it will drops further due to expiry of lease. One good news is that they are able to increase their occupancy to 90.0% which signify a recovery. They may have lease it at a lower rate but it is better than leaving it empty. Their price-to-NAV is much lower at 0.616 which means we are able to buy it at 38% discount. Gearing is at 42.1% and their secured NAV is at 80% of their trading price which show the level of margin of safety.

At this price of $0.545, it seems very very very low already. With the statistics getting more and more favourable, it seems a good time to enter the market although we are still looking at how Brexit is affecting the overall market. Will be looking closely and maybe I will start entering this counter very soon. (I have a very small portfolio on this)

3 comments:

  1. I notice that the dividend of Sabana REIT reduced from 9.53 cents at 2011 to 6.85 cents at 2015.So the price of this REITS keeps drop. Do you have any comments on it?

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    Replies
    1. No doubt that they are struggling and there were issues with leasing which led to the drop in occupancy and also weaker commitment from master lessee. The question is whether you believe in it and whether you are willing to take this rough ride. And also to me, looking at the current statistics is more critical than the past.

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  2. other than sabana, what other REIT doare you looking and analyzing.?

    ReplyDelete