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.

Monday, September 14, 2015

Analysis of Keppel REIT - Getting more and more attractive.

Current Price on 8th Sept 2015 = $0.945
  • Yield = 7.28%  
  • Price-to-book Ratio = 0.669
  • Assets per unit = $2.309
  • Debt per unit = $0.897 (including current liabilities)
  • Gearing = 38.8%
  • Secured NAV = $1.142 (120% of trading price)
Keppel REIT's price has fallen to a level that I thought was quite attractive. Therefore, I have decided to look at the statistics for Keppel REIT.

Yield is now at 7.28% which is probably one of the highest among the office REITs. It is within my "yellow zone" which is between 7 - 8% yield. Price-to-book ratio is at 0.669 which means we are buying at 33% discount. Gearing is at an acceptable 38.8% while its secured NAV is 120% of its trading price. In the worst case scenario, we still can get back $1.142 which is great. Just great.

One point to note is that its assets are at the prime district of Singapore i.e. Marina Bay Financial Centre, Ocean Financial Centre, One Raffles Quay and Bugis Junction Towers. Imagine people telling you that you can own a piece of prime property at a 33% discount. Plus it gives you at decent 7.28% yield. I think this is the plus plus plus point for Keppel REIT.

Keppel REIT, in my opinion, has always been in competition with Fraser Commercial Trust for investors in the SGX market. Their statistics are always so similar in terms of yield. And now with Fraser Commercial Trust trading at only about 20% discount and Keppel REIT having better quality properties, I believe it is time to buy Keppel REIT for long term. In fact, when Singapore economy gets better, Keppel REIT will be the first to benefit and its trading price should go up.

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