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.

Friday, May 13, 2016

Analysis of Ascendas REIT

Current Price on 9th May 2016 = $2.44
  • Yield = 6.08%  
  • Price-to-book Ratio = 1.125
  • Assets per unit = $3.695
  • Debt per unit = $1.526 (including current liabilities)
  • Gearing = 41.3%
  • Occupancy = 87.9%
Ascendas REIT has announced their results. I am interested to research on this only because it acts as a proxy to other industrial REITs. Let's look at the statistics.

Yield is at 6.08% which is hardly exciting. Price-to-book ratio is at 1.125 which means we are buying at a premium and that is not attractive. Gearing is at 41.3% (including other liabilities) which is just ok. Occupancy is at 87.9% which probably reflects how weak the leasing market is considering that they are the market leader.

Analyzing this counter gave me more confidence in other counters like Sabana REIT, Viva Industrial REIT, Cambridge REIT, AIMSAMP Industrial Trust, Cache Logistics Trust etc. Because they are so large, they become the standard which others hope to achieve. This set of data shows me that other REITs should at least be trading at valuation price which I have always believed. With such statistics, I can see a lot more upside for the rest of the Industrial REITs. In fact, I won't be surprised if they launch a takeover for one of the smaller REITs listed on SGX.

I won't be entering Ascendas REIT. It is too expensive for me and I expect the price to drop actually. It is just a reference for analysis of other REITs.

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