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, April 7, 2016

Analysis of Ascendas Hospitality Trust - Sale of Assets dropped. Now what? (Updated as of 7.45pm)

Current Price on 7th Apr 2015 = $0.68
  • Yield = 8.53%  
  • Price-to-book Ratio = 0.966
  • Assets per unit = $1.26
  • Debt per unit = $0.556 (including current liabilities)
  • Gearing = 44.1%

Ascendas Hospitality Trust just announced that they are not selling the assets which lead to a 10% drop in their share pricing. It is a surprise to me as to all shareholders as the opening price the following day does not allow any reaction time of existing shareholders. So now what? Let's take a look at the statistics.

With a yield of 8.53% now, their yield is one of the best among the Hospitality Trust, comparable to OUE Hospitality Trust and Frasers Hospitality Trust. Their price-to-book ratio is also at at 0.807 which is dependent on the latest valuation (Sorry guys, I did not realize that there is an independent valuation in an earlier announcement. Updated as of 7.45pm) which means we are buying at a discount of 20%. Probably those buyers are unwilling to pay at this price which resulted in the collapse of the potential deal. Gearing is quite high at 44.1%.

Moving forward, we can't just sell it just because of a negative news. Have to evaluate the fundamentals and theirs still seems good to hold at current price. Just that for those like myself who bought at a higher price, we are sitting at a paper loss which I am not overly concerned at this point because our mindset in investment is that we are buying a business, not a stock and we should believe in the business before we invest in it. So, for my 14,000 shares, I will hold on to it and enjoy the dividends.

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