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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.

Friday, May 5, 2017

Analysis of Far East Hospitality Trust

Current Price on 28th Apr 2017 = $0.60
  • Yield = 7.47%  
  • Price-to-book Ratio = 0.646
  • Assets per unit = $1.394
  • Debt per unit = $0.465 (including current liabilities)
  • Gearing = 33.4%
  • Secured NAV = $0.929 (154% of trading price)
Far East Hospitality Trust has been on my radar these days and I have recently purchased 100,000 shares at $0.61. These are the reasons for me to do my purchase.

Yield is at 7.47% which is quite modest and not really up to my target of at least 8% but there are not many on the market in the first place. However, what it attracts me is the deep discount to NAV that it is trading at. It is trading at 35% discount which means we are buying hotels and serviced residences at such a cheap price. Moreover, their debts are all unsecured which means the secured NAV is at 154% of their trading price which is extremely attractive. Gearing is at healthy 33.4%.

With such deep discount and recent events which helps REITs to realize their NAV in the positive way i.e. Saizen REIT which is successful and Sabana REIT which is in the process. Discount to NAV seems to take over precedence over yield now. Their peers are also trading at a discount but not as much as Far East. So this is one main reason why I purchase them.

Will continue to look at it closely and enjoy the dividends that they are giving us. :-)

3 comments:

  1. Hello, like always your blogs are great insights and provide insights in evaluating investments. Specifically for the Far East Hospitality reading you blog and one thing that I notice on their rations is their low cash flow yield of 1.6%. Does that really bother you? or something you take into consideration? If so what other factors make you comfortable?

    Regards
    Deepak

    ReplyDelete
  2. Hi, Far East Hospitality Trust PE is very high (30++), any concern about this? Thanks.

    ReplyDelete
  3. Hey man, Love your blog, it really help me lots on my learning curve.

    Great analysis, but i have a question on Far East Hospitality Trust.

    As of the data from Q1 2017 Financial Statement. Their quick ratio looks good but it seems that the Current Liabilities to be $304,373,000
    and Current Asset to be $54,070,000. It have a higher current liabilities than asset. Do you think it is important that we should consider that?

    PS. I do not have an accounting background and just started learning about stocks, so I may have read the financial statement wrongly.

    Cheers,
    Antz

    ReplyDelete