- Yield = 8.51%
- Price-to-book Ratio = 0.718
- Assets per unit = $0.917
- Debt per unit = $0.374 (including current liabilities)
- Gearing = 40.8%
- Secured NAV = $0.255 (69% of trading price)
Sabana REIT has recently delivered a set of results which I thought was a small improvement from previous quarters. Moreover, the recent sell-down gives us an opportunity to enter. Let's take a look at the statistics.
Despite the recent reports about weak management, their yield is currently at 8.51% which is very high compared to other REITs. Moreover, the price-to-book ratio is at 0.718 which means we are buying at close to 30% discount. Gearing is at 40.8% which is close to 45%.
Discount-to-NAV has featured strongly recently in my analysis because it provides a lot of margin to safety aka it won't drop as much and it will eventually rise. With a 30% discount and all properties based in Singapore, I believe this is a rare opportunity.
Although there are a lot of negativity about this REIT, I believed that it has been priced in. With high yield and trading at a discount to NAV, I believe this is a time to buy. The question is whether we have the ability to hold until it recovers.
Despite the recent reports about weak management, their yield is currently at 8.51% which is very high compared to other REITs. Moreover, the price-to-book ratio is at 0.718 which means we are buying at close to 30% discount. Gearing is at 40.8% which is close to 45%.
Discount-to-NAV has featured strongly recently in my analysis because it provides a lot of margin to safety aka it won't drop as much and it will eventually rise. With a 30% discount and all properties based in Singapore, I believe this is a rare opportunity.
Although there are a lot of negativity about this REIT, I believed that it has been priced in. With high yield and trading at a discount to NAV, I believe this is a time to buy. The question is whether we have the ability to hold until it recovers.
>Despite the recent reports about weak management, their yield is currently at 8.51% which is very high compared to other REITs.
ReplyDeleteThe question is whether yield is high because of management effort (rising DPU) or due to dropping price.
Hi, do you have any thoughts regarding the management of Sabana and does it have any influence in your belief that this may be a good opportunity to buy? Curious to hear your thoughts.
ReplyDeleteCheers~