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.

Thursday, March 9, 2017

Analysis of Sabana REIT - Realizing NAV on the cards?

Current Price on 7th Mar 2017 = $0.47
  • Yield = 7.49%  
  • Price-to-book Ratio = 0.675
  • Assets per unit = $1.149
  • Debt per unit = $0.453 (including current liabilities)
  • Gearing = 39.4%
  • Secured NAV = $0.407 (86.5% of trading price)
Recently Sabana REIT has been on a roll and been in the news for the right and wrong reasons. On one hand, they are facing a revolt from unitholders. On another hand, there is a new substantial shareholder which means there are interest from big companies to come in and take advantage of the situation to earn money. In any case, those news has been pushing the price up which I have benefited by quite a lot. Let's take a look at the statistics.

With a yield of 7.49%, it is not good by industrial REIT standards. However, it is diluted because of the rights issue and I am expecting their yield to be around 8.5% instead. Its price-to-book ratio is 0.675 which means we are still buying at above 30% discount. Secured NAV is $0.407 which is pretty high.

Recent news and developments shows that when the trading price is at a discount to NAV, there is a opportunity of being noticed and acquired by bigger companies because of its cheap value. Having a sponsor provides stability but no potential for such a development. It affirms my belief that we should buy REITs that are trading at a substantial discount to NAV to protect our capital.

I am heavily vested with 235,500 shares now worth about $110,000, giving me a paper gain of about $18,000 and dividends of $2,000. It may just well be enough and time to lock in some gains.

3 comments:

  1. Hi, could you guide us how to get the information of Price-to-Book Ratio, Assets per unit, Gearing, Secured NAV...etc.

    Example:
    Price-To-Book Ratio = Stock Price / (Total Assets - Intangible Assets and Liabilities)

    How to get the Intangible Assets and Liabilities from SGX or other useful website?

    ReplyDelete
  2. What is your view on the upcoming EGM to vote out the current management team?

    ReplyDelete
  3. What are you views on the upcoming EGM to vote out current management?

    ReplyDelete