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, June 5, 2017

Analysis of Sabana REIT - Dust Settling down and a relook at fundamentals

Current Price on 3rd June 2017 = $0.425
  • Yield = 8.28%  
  • Price-to-book Ratio = 0.707
  • Assets per unit = $0.97
  • Debt per unit = $0.369 (including current liabilities)
  • Gearing = 38.1%
  • Secured NAV = $0.315 (74% of trading price)
Sabana REIT has been in the news for the right and wrong reasons. After the failure of the revolt by unitholders, price went down by quite a bit and managed to stabilize at $0.425ish. There are other announcements like cancellation of purchase of property which is good in some sense because it wasn't very yield-accretive in the first place. But the funds raised by rights issue will go to repayment of debt which somehow will stabilize the yield and also less likely to default. Thus, it is a good time to relook at the fundamentals.

At 8.28% yield, its yield is quite strong although not the best. Viva Industrial Trust and Soilbuild Business Space REIT are giving higher yield. What is attractive is the price-to-book value which is at 0.707. It means we are buying at 30% discount which is good. And this is much better than Viva Industrial Trust and Soilbuild Business Space REIT. Gearing is at a healthy 38.1% and its secured NAV gives some stability to the REIT.

I have initially sold most of my holdings at $0.465 which is before the EGM. Now with the REIT stabilizing at $0.425, I may just switch over my funds which are parked at OUE Commercial Trust to Sabana REIT to gain more yield.

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