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 $1,160/month.



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Monday, December 22, 2014

Analysis of Far East Hospitality Trust

Current Price on 15th Dec 2014 = $0.82
  • Yield = 6.44%  
  • Price-to-book Ratio = 0.84
  • Assets per unit = $1.434
  • Debt per unit = $0.452 (including current liabilities)
  • Secured NAV = $0.976 (118% of trading price)
Recently, one reader asked me about Far East Hospitality Trust. I must admit that I forgot that there is such a counter. It can be confusing especially when there is Fraser Hospitality Trust which almost have the same acronym.

Looking at the statistics, it is very interesting. It has a fantastic price-to-book ratio of 0.84 which means that it is trading at a 16% discount. Moreover, all its debts are unsecured, giving a Secured NAV of $0.976 which is 18% higher than their trading price. As far as price-to-book ratio and secured NAV, this is the best among the hospitality trust, and probably one of the best among all the SREITs.

The only problem is its yield which is very low at 6.44%. Moreover, it reported a drop in its yield recently. In my opinion, they have the properties but it is not generating enough cashflow for its unitholder. Compared to CDL Hospitality Trust which is giving 6.05% but trading at 11.2% premium of its NAV, CDL is doing better.

However, it just shows how much potential that Far East Hospitality Trust has to improve themselves to match the rest and REITs usually are able to do so. To me, I will need more signs to show that they are on an improvement and growth path in its yield before investing in it.

Thursday, December 18, 2014

Analysis of Accordia Golf Trust

Current Price on 15th Dec 2014 = $0.745

Accordia Golf Trust has dropped quite a bit recently, back to the low of $0.745. I have read an analysis report which says that it is quite low and it is attractive. I believe that he has based his analysis on these statistics.
  • Yield = 9.13% (11.81% for the first year) (Or is it?...)
  • Price-to-book Ratio = 0.809 (Or is it?...)
  • Assets per unit = $1.920 (Or is it?...)
  • Debt per unit = $0.999 (including current liabilities) (Or is it?...)
  • Gearing = 52.0% 
However, I have also noted that Japanese Yen has dropped from 80 Yen to about 95 Yen per Singapore Dollar which is almost a 20% drop. So here is my revised statistics.
  • Yield = 7.30% (9.45% for the first year) 
  • Price-to-book Ratio = 1.011
  • Assets per unit = $1.536 
  • Debt per unit = $0.799 (including current liabilities) 
  • Gearing = 52.0% 
This statistics is very much the same as when Japanese Yen is at 80 Yen per Singapore Dollar and its trading price is at about $0.93. Thus, I am basing my analysis on the revised data and I don't think it is as attractive as what the original statistics. I remember LippoMall Retail Trust suffered the same problem when Rupiah dropped against Singapore dollar.

With so many REITs around and some owns only overseas properties, it is important to look at the currency exchange as well just to make sure that the statistics still stands.

Monday, December 15, 2014

After my break... Keppel DC REIT and OUE Hospitality Trust.

Hi everyone,

It is great to have an overseas break from work to enjoy some couple time with my wife (specially important because usually my two kids will take most of our time). Over this holiday, Keppel DC REIT launched their IPO which I missed. I would have bid for it as it is priced at the top end of their indicative price and it did move above IPO price.

Just before I left, I predicted that OUE Hospitality Trust will drop due to their acquisition of Crown Plaza Hotel. It seems that I am wrong as it move up one cent instead. Well, the market has responded positively to the news. Maybe I should be more cautious in my analysis but I am still staying away from it.

Bonuses are coming in so there is excess cash which I am thinking of what to do with it. To me, I rather buy and collect investment as Christmas present than other things. I guess this is a hobby which I enjoy. :-)

Friday, December 5, 2014

Analysis of AIMS Property Securities Fund

Current Price on 26th Nov 2014 = $0.127
  • Yield = 4.15%  
  • Price-to-book Ratio = 0.578
  • Assets per unit = $0.216
  • Debt per unit = Nil (including current liabilities)
Recently I am looking into AIMS Property which attracted my attention with its extremely low price-to-book ratio of 0.578. Moreover, they have cleared their debts which means you own everything without the risk of losing your money. Moreover (again), it has about $0.08 cash on hand. Compared it to their last traded price, it is about 60%.

Their distribution is very low at this point at 4.15% but I believe after going through so much in their reconfiguration of their portfolio it is time to invest and grow. However, we are still not very sure how it will come about. Looking at their track record of turning AIMSAMP Industrial Trust around, they do have the experience to turn it around and value add to the fund.

To me, this is going to be a friendly rival to Global Investment Limited which faced a similar situation earlier as well. Looks like it is time to raise cash and invest in this counter. (The only problem is its illiquidity which result it very wide buy-sell spread.)

Wednesday, December 3, 2014

Money Savings Tips through Credit Cards

This is a repost from my other blog http://credit-card-offers-sg.blogspot.sg/

I just thought that it is important to help everyone and share how I save money from my necessary expenses. A dollar saved is a dollar earned. Here it is. Enjoy


Monday, December 1, 2014

Analysis of OUE Hospitality Trust - Acquisition of Crown Plaza Hotel

Current Price on 28th Nov 2014 = $0.90
  • Current Yield = 7.29%  
  • Price-to-book Ratio = 0.903
  • Asset Per Unit = $1.357
  • Liabilities per unit = $0.456
  • Gearing = 33.5%
OUE Hospitality Trust has just announced that they are buying Crown Plaza Hotel and its extension for half a billion dollars. The above statistics are the ones before the acquisition.

In my view, this acquisition is beneficial for OUE shareholders and not OUE Hospitality Trust holders. To OUE Hospitality Trust, it may be just what I would say "Net Equal" situation, meaning with the same yield, and same NAV. The increase in yield is from 7.29% to 7.56% if it is funded entirely by debt. However with that, their gearing will be 47.9% which increases its risk.

Therefore, they are likely to finance it partly with equity which will lower the yield to 7.34%. To me, the increase is too little. No doubt they are diversifying their asset base but they need to purchase it with increase in yield at least.

They have not announced whether they are going for 100% debt or partly financed by equity. But in my opinion, when it opens on 1st Dec, I am predicting that their share price will drop due to its increased risk.

Friday, November 28, 2014

Universal Terminal tests waters for trust IPO | TODAYonline

Universal Terminal tests waters for trust IPO | TODAYonline

One more trust in the process of listing. It is an oil storage terminal trust which is unique. They have said that the listing date is about 18th Dec, in time to catch the bonuses that everyone gets at the end of the year. (Although I am expecting a higher yield actually)

Waiting for more details to come :-)