Welcome

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.

Wednesday, July 11, 2018

Analysis of Far East Hospitality Trust - Recent drop makes it attractive

Price on 10th July 2018 = $0.625
  • Yield = 6.02%  
  • Price-to-book Ratio = 0.718
  • Assets per unit = $1.417
  • Debt per unit = $0.546 (including current liabilities and perpetual securities)
  • Gearing =  38.5%

Far East Hospitality Trust has dropped quite a lot recently. To be frank, I was queueing to sell at $0.655 last month but did not make it. Wasn't reactive enough to sell it quicker at a lower price so I am still holding on to about 103,000 shares. Before I make the next move, let's take a look at the statistics.

With a 6.02% yield, it is not attractive at all. This is probably my lowest yielding investments in my portfolio currently. What makes it attractive is its price-to-book ratio which is at 0.718. It means we are buying at almost a 30% discount. This is quite rare considering that all their properties are based in Singapore. Gearing is at a healthy 38.5%.

It has fallen from a high of $0.775 in the beginning of the year and I really regret not selling earlier. I was persuaded by the project that they are embarking on, the recent acquisition that they had which led me to believe that their distributions will be on the increase. However, I don't think I am right in this sense and the wait is longer than I expected.

Having said that, $0.625 pricing is already quite low and its price-to-book ratio is already very low as well. I am continuing to hold on to this, and hold on to my previous belief as well, until a better opportunity arrives.

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