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 5, 2018

Analysis of LippoMall Retail Trust - Indonesian REIT trading at a premium

Current Price on 1st Jan 2018 = $0.40
  • Yield = 8.60%  
  • Price-to-book Ratio = 1.132
  • Assets per unit = $0.717
  • Debt per unit = $0.364 (including current liabilities)
  • Gearing = 50.7%
  • Occupancy = 93.8%
Last month, LippoMalls Indonesian Retail Trust went down from $0.43 to $0.39 because of a report that their credit rating might drop to junk status which affected confidence of investors. Let's see the statistics.

Yield is at 8.60% which is currently ranked only behind Asian Pay Television Trust (but bear in mind that APTT is a business trust). However, their valuation is also quite low so price-to-book ratio is at 1.132 which means we are buying at 13% premium to their valuation. Gearing, if you include perpetual securities apart from debt, is quite high at 50.7%. Occupancy is at 93.8% which is pretty healthy.

A question to ask is that their properties is in Indonesia so whether does it have the stigma that it is not in Singapore or other developed countries and it is more risky? Because the trading price does not show. An opportunity to invest in Indonesia legally and earning a good return. Having said that its price-to-book ratio may well be not justified and probably I should have switch to another counter before the collaspe. Even at today's pricing, it looks quite fairly valued and probably why it can trade at a premium is that their yield is still high and holding well.

I am vested with 30,000 shares, and I am observing whether I should unload and switch to another counter.

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