Analysis of Keppel REIT - Big and Steady but...

Current Price on 15th July 2019 = $1.26

• Yield = 4.41%  
• Price-to-book Ratio = 0.962
• Assets per unit = $2.223
• Debt per unit = $0.914 (including current liabilities, perpetual securities and non-controlling interest)
• Gearing = 41.1%
• Secured NAV = $1.309 (103% of trading price)

It has been a while since I research on Keppel REIT. I remember it was one of my anchor investments a few years back. But I have sold it long time ago and never look back. They are a big REIT in terms of assets and market capitalization. Now I just want to take a look and see how far it has come.

With a yield of 4.41%, their yield is actually lower than some of the bonds that is offered in the market. It is probably one of the lowest yielding REIT currently. However, its price-to-book ratio is 0.962 which means we are still buying at a small discount to NAV. Moreover, all their debts are unsecured which means their Secured NAV is at 103% of their trading price. Thus, it provided quite a strong margin of safety.

I like its secured NAV because it shows how secure my investments will be and it is actually higher than the current trading price. Just that the yield is way too low to be attractive. If you want a more secure, stable big REIT, like a blue chip, this is a good one. But upside will probably be minimal unless they are able to improve their DPU in a substantial way. For me, I prefer to give this a miss as it is way below my criteria for yield.