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.

Tuesday, July 16, 2013

Analysis of OUE Hospitality Trust (IPO)

IPO Price at = $0.88 - $0.90
  • Current Yield = 7.20%  
  • Price-to-book Ratio = 0.996
  • Assets per unit = $1.352
  • Debt per unit = $0.449 (including current liabilities)
  • Gearing = 33.2%
OUE Hospitality Trust has also lodged their preliminary prospectus one day after SPH REIT. This creates a situation where they are in direct competition for funds. It so happen that their key assets are just a street apart from each other. Thus, it is important to look at the statistics.

Its yield is at 7.20% which is much higher than 5.58% in SPH REIT. Moreover, it is priced quite farely at 0.996 price-to-book ratio. Its gearing is also at a healthy 33.2%. Their comparable hospitality REITs have yield that are below 7%, so there is a chance for upside.

If I were to choose only one to subscribe, I will choose OUE Hospitality Trust because of its comparable price-to-book ratio and its better yield. I am trying very hard not to deviate from my criteria and OUE Hospitality Trust miss by just a bit (on the yield).

Nevertheless, it is still important to look at the final pricing. Again, if it is not priced at the top end, it means that there is not enough demand at the top pricing. Let's see what is the price they will give to us.

No comments:

Post a Comment