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.

Thursday, July 9, 2015

IPO Analysis of Manulife US REIT

Offering Price = $0.82 (US$0.617)
  • Yield = 6.00% 
  • Price-to-book Ratio = 1.065
  • Assets per unit = US$0.933
  • Debt per unit = US$0.354 (including current liabilities)
  • Gearing = 38.0%
I was about to post this when it is launched but I received news that they have pulled it off last night. Nevertheless, let's just look at the statistics and see whether it is worth it even if it is launched.

Yield is at 6.00% which is hardly exciting. It's price-to-book ratio is 1.065 which means we are paying a premium to buy these assets. Gearing is at 38.0% and they have a credit rating of "BB" which is not strong. To me, all the statistics does not conform to my criteria.

One more thing which I thought was important. In other news report (see my earlier post), when they do their pre-marketing, their dividend yield was reported to be between 5.5% to 5.9% with a price-to-book ratio of 1.1 to 1.2. With these data and the current one from their prospectus, I am quite sure they had trouble getting investors to invest before their IPO. That is why they have to reduce their price to improve the yield to convince investors. To me, that is a bad bad sign.

I am quite sure that when it is officially listed for trading, it will drop below $0.82 so I am not applying for any lots. Although they are located in US, they are traded in SGX which means they compete with funds and valuation with local REITs and business trusts. And I believe that Singapore REITs is able to offer more. So, it may well be good news for investors that they are pulling it out.

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