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 $1,052/month.



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Monday, August 25, 2014

Updates on Current Holdings

In the month of August, I have made some trades which I thought was right to rebalance my portfolio. Here are the details.

I have sold my holdings on Croesus Retail Trust, yielding a capital return of about $2,000. One of the reasons why I sell it is because of its premium Price-to-book ratio. Also the yield is about 7%. Of course, later then I realize that I made a mistake in my calculations and the yield is actually 7.41%. Nevertheless, selling 19,000 shares at $1 is quite a good deal already although it continues to go up and there is a chance of revaluation.

I got a lot of IPO on IREIT Global at $0.88. And I am glad that it is holding up. Haven't done my analysis after IPO yet but seems only ok at this point.

I am looking at entering either Viva Industrial Trust which gives me a yield of 8.5% or OUE Commercial Trust which is trading at about 20 - 25% discount to NAV. Viva Industrial Trust can give its high yield is because of income support which will expire. However, if they are able to fill up their vacant spaces, their yield will hold up. OUE Commercial Trust can only rely on its revisions on their existing rents and may need to acquire to grow. This is on top of their income support which they currently have. The good news is that they are stable with strong sponsor.

Another candidate is Accordia Golf Trust which has fallen to a pretty low level. Quite difficult to decide from either of the three. I am trying out with Viva Industrial Trust first.

Monday, August 11, 2014

IPO Analysis of IREIT Global

IPO Price = $0.88
  • Yield = 7.60%  (2014) 8.00% (2015)
  • Price-to-book Ratio = 1.142
  • Assets per unit = $1.159
  • Debt per unit = $0.388 (including current liabilities)
  • Gearing = 33.5%

This is long overdue. I hope that I am not too late. One more REIT on IPO and this time round, it is on German properties. I think this is very interesting because it would be the first pure Europe REIT. Let's look at the statistics

Yield is at a strong 7.60% in 2014 and 8.00% in 2015 which is quite high, second only to Viva Industrial Trust. However, its price-to-book ratio is also at the high of 1.142 which means we are paying almost 15% premium for the property. I wonder how the valuation is done and if it is valued so lowly, what does it show on the economy in Germany.

We will take the statistics at face value and analyze. Same to Viva Industrial Trust, high yield and high price-to-book ratio. I will choose Viva Industrial Trust over IREIT Global for higher yield and lower price-to-book ratio, especially when it has recently XD-ed and price has dropped to an acceptable level.

Statistics-wise, it is not favourable but I am applying for 4 lots to gain exposure and experience on European REITs.

Wednesday, August 6, 2014

Analysis of Viva Industrial Trust

Current Price on 1st Aug 2014 = $0.82
  • Yield = 8.40%  
  • Price-to-book Ratio = 1.09
  • Assets per unit = $1.273
  • Debt per unit = $0.521 (including current liabilities)
  • Gearing = 40.9%

Viva Industrial Trust has reported its results on 31st July which has given me mixed feelings. The yield is at a high of 8.40% which I think is very good. It is the highest among the REITs in Singapore, and it fulfills my criteria of 8%.

However, its price-to-book ratio is also at a high of 1.09 which means we are paying a premium of 9% more than we should. Moreover, there is no secured NAV to talk about and its credit rating is not at investment grade either (BB+).

8.40% is really attractive and I won't get anything near for other REITs. But the price-to-book ratio is also too high for me. I am giving this a miss this time round and look for those with 7+% yield and discount to NAV.

Monday, August 4, 2014

Analysis of Mapletree Greater China Commercial Trust

Current Price on 31st July 2014 = $0.92
  • Yield = 6.78%  
  • Price-to-book Ratio = 0.907
  • Assets per unit = $1.759
  • Debt per unit = $0.744 (including current liabilities)
  • Gearing = 42.3%
  • Secured NAV = $1.015 (110%)

MGCCT has reported their results last week which showed favourable results. Yield is at a high of 6.78% which is commendable considering that it is a retail REIT. Price-to-book ratio is also at 0.902 which means that we are purchasing at 10% discount which is favourable as well. Its secured NAV is at 110% which means that this REIT is not going to fall anytime soon plus you can get a guaranteed $1.015 if it choose to dissolve.

REITs with high yield and trading at a discount are hard to come by these days. I believe that those which are still trading at a discount to NAV will eventually move up. With my current plans to liquidate my investment in AIMS AMP, MGCCT will be one of the strong contenders to take over, competing with OUE Hospitality Trust, Sabana REIT and Viva Industrial Trust. Far East Hospitality Trust is also being considered for its high Secured NAV.

Friday, August 1, 2014

Analysis of AIMS AMP Industrial Trust

Current Price on 31st July 2014 = $1.485
  • Yield = 6.87%  
  • Price-to-book Ratio = 1.000
  • Assets per unit = $2.311
  • Debt per unit = $0.826 (including current liabilities)
  • Gearing = 35.8%
  • Secured NAV = $0.552 (37%)

AIMS AMP Industrial Trust has reported its results which is within the expected range. DPU has risen by a little bit and NAV also increases by 1 cent which is good. Another plus point is its updates on their redevelopment efforts which has been fantastic, achieving TOP way early and below expected development cost. Thus, the value creation that it has for us (in NAV terms) will continue to increase.

However, price has went up recently as well, moving up to $1.485 which resulted in current yield at 6.87%. I am expecting DPU to increase by 10% in the next 6 months following the TOP, thus, giving about 7.5% yield by the end of the year. It is within my holding range of 7 - 8% yield. Moreover, they are already trading at close to 1 for price-to-book ratio which makes it unattractive.

AIMS AMP Industrial Trust has served me well in terms of enhancing the value of my investment and its high yield which contributes to my cashflow and investments. It may be time to call it to an end if it continues to move upwards. (which hasn't since their announcement). I will be lining up to sell at around $1.495 - $1.50 price range and look for alternative investment. (By the way, I am considering Viva Industrial Trust)

Wednesday, July 30, 2014

Analysis of Suntec REIT

Current Price on 24th July 2014 = $1.84
  • Yield = 4.93%  
  • Price-to-book Ratio = 0.869
  • Assets per unit = $3.334
  • Debt per unit = $1.216 (including current liabilities)
  • Gearing = 36.5%
  • Secured NAV = $1.517 (82%)

Suntec REIT has reported its results which has not really show the increase in DPU due to its major AEI. Yield is at a low of 4.93% but its price-to-book ratio is at an attractive rate of 0.869. Moreover, its secured NAV is about 82% of its trading price.

When its price is at $1.50, I have considered buying. The only hindrance is its yield. It has risen by 20% already which shows that many investors are looking at its forward yield instead of current yield (which I am not very sure)

I prefer to have it visible and stick to my investment portfolio so I will still give it a miss.

Friday, July 25, 2014

IPO Analysis of Accordia Golf Trust

IPO Price on 24th July 2014 = $1.00
  • Yield = 7.00% (9.10% for the first year)
  • Price-to-book Ratio = 1.086
  • Assets per unit = $1.920
  • Debt per unit = $0.999 (including current liabilities)
  • Gearing = 52.0%

Accordia Golf Trust sprang a surprise IPO for Singapore investors which really caught me. I don't have a chance to analyse it and decide whether I should apply for it. Nevertheless, here is the statistics.

With 9.10% in the first year and 7.00% onwards, it looks attractive on the first year but subsequently, I don't think so. Secondly, it has an extremely high gearing of 52.0% which actually mirrors Croesus Retail Trust. I think they are taking advantage of the cheap loans and money printing to raise their leverage. This one, I need to check again.

Much depends on the final price of the IPO (between $0.97 to $1.00) to guess the opening price and subsequent pricing. If it is below $1.00 which is the top end, I don't think it will move up further. If it is priced at the bottom end of $0.97, get ready for it to drop further. Anything between, price will stay.

Even if I have the chance, I won't take it.