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.

Tuesday, October 25, 2016

Analysis of Capital Commercial Trust - Office REITs still at a very low yield

Current Price on 20th October 2016 = $1.60
  • Yield = 5.75%  
  • Price-to-book Ratio = 0.916
  • Assets per unit = $2.698
  • Debt per unit = $0.951 (including current liabilities)
  • Gearing = 35.3%
  • Credit Rating = A3
Capital Commercial Trust has reported their results. To be frank, I have not been interested in them for a long time due to their low yield and pretty high volatility in trading price. Let's take a look at the statistics first.

With a yield of 5.75%, the yield is quite low. But considering that you are buying into a reputable management and strong sponsor, it adds to the credibility. Its price-to-book ratio is much better at 0.916 which means we are buying at an 8% discount. Its gearing is quite healthy and it has a strong credit rating of A3 which is better than most unrated bonds in the market. Thus, their yield is probably quite comparable or even lower.

While I understand the strength of the management which resulted in high trading price, I do not believe that it will be value adding to my portfolio. I am looking at high yield + discount to NAV which probably add some risks into my portfolio but also gives me a higher passive income. Thus, I still won't consider this into my portfolio.

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