- Current Yield = 8.49%
- Price-to-book Ratio = 1.059
- Asset Per Unit = $1.430
- Liabilities per unit = $0.680
- Gearing = 47.5%
Viva Industrial Trust has a few announcements which are important. The most important one is that they have announced their acquisition of two buildings which gives a 10.4% yield. For a small REIT like Viva Industrial Trust, this is a big acquisition. It will improve their yield to 9.49% which is very high, about 2% higher than the closest rival.
Their assets and liabilities went up as well, putting pressure on their gearing which is increased to 47.5%. Their price-to-book ratio still stands at an unattractive 1.059 which means we are paying 5.9% premium to their valuation. One more point to note is that their credit rating is BB+ which is not investment grade.
I remember AIMSAMP Industrial Trust was in this state as well with credit rating below investment grade. It took them a long time to achieve upgrade which substantially improves their trading price. For Viva Industrial Trust, I believe the same will happen. The question is whether you are willing to ride this journey with them.
9.49% from May 2015 onwards is very attractive (Considering that they will complete their purchase in Q4). I am thinking of switching half my holdings from AIMSAMP to Viva Industrial Trust.
Their assets and liabilities went up as well, putting pressure on their gearing which is increased to 47.5%. Their price-to-book ratio still stands at an unattractive 1.059 which means we are paying 5.9% premium to their valuation. One more point to note is that their credit rating is BB+ which is not investment grade.
I remember AIMSAMP Industrial Trust was in this state as well with credit rating below investment grade. It took them a long time to achieve upgrade which substantially improves their trading price. For Viva Industrial Trust, I believe the same will happen. The question is whether you are willing to ride this journey with them.
9.49% from May 2015 onwards is very attractive (Considering that they will complete their purchase in Q4). I am thinking of switching half my holdings from AIMSAMP to Viva Industrial Trust.
Hi jc, do you mind to share how we get the company's credit rating? Is it stated in their annual report?
ReplyDeleteThanks..
Dear Mf Foong,
DeleteCredit rating is stated in their annual report given by one of the Big Three credit rating companies.
Happy investing.