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.

Thursday, January 16, 2020

Analysis of Far East Hospitality Trust - Running away

Current Price on 15th Jan 2020 = $0.78
  • Yield = 4.67%  
  • Price-to-book Ratio = 0.896
  • Assets per unit = $1.417
  • Debt per unit = $0.546 (including current liabilities, perpetual securities and non-controlling interest)
  • Gearing = 38.5%
  • Secured NAV = $0.871 (111% of trading price)
I sold Far East Hospitality Trust sometime last year and I have to say that I regret it a lot because ever since I sold it, it has been heading north. Here are the statistics.

With current yield of 4.67%, it is much lower than most REITs in the market. However, one attractive factor is that their secured NAV is at 111% of their trading price. It means that if they are selling off their properties today, we will be getting $0.871 per share which is fantastic. Moreover, this secured NAV is not tied to any loans which makes it even safer.

I forgot why I sell off much earlier last year already. Probably I was looking at other counters when I did it. But I failed to see the value of secured NAV then which would be much higher. Well, it is too late.

Their yield is very low as of now, trading closer to a bond offering which shows how secure their income is, considering that there is a lack of supply and demand is increasing in the hospitality sector.

Nevertheless, I am now vested with OUE Commercial Trust which has a hospitality component so will be looking at that first before any decision is to be taken. Having said that, Far East Hospitality Trust has moved too far and I am not going to chase it.

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