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, June 28, 2017

Netlink NBN Trust IPO - Looking more like a bond

IPO Price on 27th June 2017 = $0.93
  • Yield = 4.99% (2018)  
  • Price-to-book Ratio = 1.077
  • Assets per unit = $1.16
  • Debt per unit = $0.296 (including current liabilities)
  • Gearing = 25.6%
Netlink NBN Trust is launching its IPO next month which is long awaited for all Singaporeans. And I really hope that all Singaporeans have a chance to get something i.e. to share Singapore's assets. Let's take a look at the statistics first.

With a yield of 4.99%, it is hardly appealing. Probably one of the lowest yielding business trust that you can find in Singapore. Moreover, you are buying at a premium of 7.7% which is again hardly appealing. Gearing is low at 25.6% which is the only positive.

One positive is that this business is so stable that you won't be getting any lower.They are a monopoly in this business. But their pricing is regulated so they would have trouble growing their business even though they mention that they have a 5.50% growth which is really not sustainable.

Thus, I would think that it functions more like a perpetual securities (bonds with no maturity) where their price will move in a very narrow band (+- 5%) and giving out regular coupons. If we compare it with the bonds that are on the market now, it will seem one of the better ones. Only Hyflux or Aspial bonds are comparable.

If they are not pricing it at the top end of the range i.e. $0.93, it means that the demand is not high and the price will definitely not go beyond $0.93. If they priced it at the lowest end, i.e. $0.80, it means that there is really no demand and price will go lower than $0.80 and that will be disastrous for those who applied for its IPO. If I were to guess the pricing, I would prefer it to be $0.86 (their NAV price) or slightly lower.

I won't be applying for this because I know definitely I will have a chance to buy it at IPO price once it starts trading. 


  1. This is touted as one of the hottest IPOs in years. May I know why do you think the demand for Netlink would be low? Thanks for sharing!