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.

Wednesday, March 9, 2016

Rights Issue by OUE Hospitality Trust

Current Price on 9th March 2016 = $0.75
  • Yield = 9.06%  
  • Price-to-book Ratio = 0.827
  • Assets per unit = $1.577
  • Debt per unit = $0.671 (including current liabilities)
  • Gearing = 42.5%
OUE Hospitality Trust has announced their plans to acquire Crowne Plaza Changi Extension with equity rights issue. This is an opportunity to invest in a hotel REIT with high quality assets both in Orchard area and Changi Airport. Thus, if we invest, we are directly involved in the tourism sector in Singapore. Let's look at the statistics.

With a yield of 9.06%, it is one of the highest yielding hotel REIT. Only Frasers Hospitality Trust can match its yield. Moreover, the price-to-book ratio also suggest that we are buying at 17% discount to valuation price which I thought was quite favourable. (Info is before rights issue) Gearing is at 42.5%.

I am unable to aggregate the information as they merge the earlier acquisition of Crowne Plaza Changi Airport together with the extension which painted a slightly different picture from now. It looks like they are raising more cash and less debt so I am not really sure about their final yield and NAV which is quite a pity. Since they are raising more cash, I assume their yield will be at least the same or else the acquisition will not be beneficial to shareholders. Discount to NAV may drop but trading price should still stay below NAV.

I have been quietly looking at this REIT for some time and I think this is a good time to invest for long term. Will be investing in it.


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  3. why you remove the 2comments.?good or bad leave it alone unless it is vulgar

    1. Hi Klan,

      I did not delete it. The author deleted himself. I wonder what they wrote as well.

  4. Price seems to have fallen quite a bit. Any ideas why?

  5. I wonder why you deleted the 2 comments. What views do they take?

    1. Hi Winston,

      I did not delete it. The author deleted himself. I wonder what they wrote as well.

    2. Hi Joseph,
      Thanks for your reply. I enjoy reading your Analysis on REITs & Business Trust.

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