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.

Friday, January 19, 2018

Analysis of Far East Hospitality Trust - Acquisition in progress

Current Price on 15th Jan 2018 = $0.715
  • Yield = 5.76%  
  • Price-to-book Ratio = 0.797
  • Assets per unit = $1.463
  • Debt per unit = $0.566 (including current liabilities and perpetual securities)
  • Gearing = 38.7%
Far East Hospitality Trust has announced an acquisition which by analysts, is a good move because it looks cheap. Moreover, the deal is yield accretive although it is almost entirely debt financed. Let's take a look at the statistics.

With the yield at 5.76%, it is very low. However, it will increase to 5.9% following the acquisition. 5.76% is quite the average compared to other hospitality trusts but 5.9% will be on the high side. Nevertheless, it is very low compared to other REITs. What is good is that we are buying at 20% discount which is fantastic. Others are trading at 10% discount. However, I am not sure whether they will eventually trade at that level.

I am holding on to about 103,000 shares worth $73,000 because of their NAV. Once the price goes higher, I will be more keen to sell.

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