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 $3,800/month.

Monday, February 6, 2017

Analysis of Suntec REIT

Current Price on 27th Jan 2017 = $1.725
  • Yield = 6.02%  
  • Price-to-book Ratio = 0.781
  • Assets per unit = $3.589
  • Debt per unit = $1.381 (including current liabilities)
  • Gearing = 38.5%
Suntec REIT published their results before CNY which has always puzzled me. Let's take a look at the statistics.

Yield has been stable at 6.02% which is still quite ok (but not to my standard) but their price-to-book ratio is at 0.781 which means that they are trading at a 22% discount to their valuation price. This is something which makes it attractive. Gearing is at a healthy 38.5%.

I am puzzled that they are always trading at a discount despite being one of the largest REIT in Singapore and holding on to assets which are located at prime land. Someone has told me before that valuation is quite influenced by the REIT manager but this is the only indicator that we can rely on to decide whether we are buying on a cheap. Of course, there are other business trust which has proven that NAV is not really reliable but here we are talking about properties which is relatively quite stable.

Nevertheless, Suntec REIT's yield is way too low for me and it is very unlikely that I will invest in it. Unless there are some other ways to improve the yield at my end.

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