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.

Monday, March 26, 2018

IPO Analysis of Sasseur REIT

IPO Price on 25th March 2018 = $0.80
  • Yield = 7.50%  
  • Price-to-book Ratio = 1.028
  • Assets per unit = $1.273
  • Debt per unit = $0.494 (including current liabilities)
  • Gearing = 38.8%
Sasseur REIT has launch their IPO last Wednesday night which is a boost to our REIT IPO scene. However, we still need to look at the statistics and comparison to current REITs in the market.

With a 7.5% yield, it looks quite good. Comparable REITs include BHG Retail REIT which is currently yielding at 7.2%, CapitaRetail China REIT which is yielding at 6%. However, they are offering at a premium of 2.8% which is not very attractive considering that BHG Retail REIT is trading at a discount to NAV. One other comparison is Dasin Retail Trust which is currently yielding at 8.9% and trading at a steep discount to NAV. Well, I was expecting them to offer IPO at a discount to NAV to secure a stronger margin to safety. However, it is not really the case.

I saw a news article which shows that they initially marketed at 7% but finally push to 7.5%. It reflects on the demand for higher yield for REITs with properties based in China. It also tells me that it is not likely that they will trade a 7% yield. Therefore, I am not applying to its IPO because I should be able to get it at the same price once it starts trading. I am not really interested anyway.

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