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, October 17, 2016

Analysis of Soilbuild REIT

Current Price on 16th October 2016 = $0.70
  • Yield = 7.99%  
  • Price-to-book Ratio = 0.907
  • Assets per unit = $1.275
  • Debt per unit = $0.503 (including current liabilities)
  • Gearing = 39.5%
Soilbuild REIT has published their results recently which I thought wasn't very favourable. Let's take a look at the statistics.

With a yield of 7.99%, its yield is what I call normal. Cache Logistics Trust, Sabana REIT, and Viva Industrial Trust are all trading at a higher yield. Moreover, its price-to-book ratio is 0.907 which means we are buying at 9% discount. While this is better than most industrial REITs, Sabana REIT is trading at a much lower price-to-book ratio (Of course, they have some issues with leasing so it is a greater challenge to them) Gearing is at a stable 39.5%.

With all these statistics, I think there are other REITs which I would consider. Increasingly, the Price-to-Book Ratio is a more important factor than yield as with economic slowdown, I will be looking at value more than yield. Let me try to take a look at other REITs first.

2 comments:

  1. SBREIT and VIT might be better plays if you are thinking of getting onboard the REIT bandwagon. Even BNP and Samsung have alr joined in. SSREIT has been having falling DPU for the past few quarters, and they do Islamic financing, which may be difficult to compare with its peers. VIT and SSREIT are trading at a discount because VIT has had a low occupancy esp since its focus is on business parks (which traditionally has had a lower occupancy rate compared to factory space and warehouse space). But with improvements in its VBP project, occupancy may improve further, leading to closing of the P/B gap. SBREIT on the other hand has had difficult times because it had quite a few O&G tenants affected by the low oil prices. But mgmt has since taken good proactive measures to mitigate. Also, oil prices are now on the rise, so hopefully the tenants can perform better in the near term. Your 'analysis' has room for further improvement.

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    Replies
    1. Hi Siang,

      You seem to have great information about SBReit. I'm vested and I'd like to hear more from you.

      Come over to www.investingnote.com and we can start a new discussion!

      Regards,
      Yoke Ming

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