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.

Thursday, January 19, 2012

Analysis of K-REIT Asia

Price on 19th Jan 2012 = $0.895
  • Current Yield = 8.00%
  • Price-to-book Ratio = 0.696
  • Assets per unit = $2.221
  • Debt per unit = $0.935
  • Gearing = 42.1%
  • Interest Cover Ratio = 5.5 times
  • Secured NAV = $0.64
K-REIT Asia announced their results which to me was a bit disappointing, probably because I was overly optimistic and has made errors in my analysis.

OFC, their most recent acquisition, is encumbered which reduces their secured NAV to $0.64. I have chosen to assume it to be unencumbered. Therefore, my analysis tells me that its secured NAV is $1.011 in an earlier posting. Secondly, I have predicted their distribution to be closer to their previous quarter's distributions. It turns out wrong and its distribution is lower at 8% compared to my prediction of 8.88%.

So it turns out that I was overly optimistic when I decide to invest in it. It was a time when everyone exited and I was still sure that I was right. However, the recent price movement has suggested that it might not be so bad after all. At the very least, I have not lost my capital.

I will monitor this closely (and other REITs) to see whether is it worth it to sell and invest in other REITs. It is likely that I will wait for the next report when OFC made a full 3 month contribution before I decide.

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