Singapore REIT Fundamental Analysis Comparison Table – 8 October 2019

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Technical Analysis of FTSE ST REIT Index (FSTAS8670)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) is currently trading in a Symmetrial Triangle consolidation pattern on an uptrend. The REIT index has little change from 927.94 to 929.69 (+0.19%). So far 50D SMA proves to be a good support.  Previous chart on FTSE ST REIT index can be found in the last post Singapore REIT Fundamental Comparison Table on Sep 6, 2019.

Based on the current chart pattern and and momentum,  the sentiment is BULLISH and the trend for Singapore REIT direction is still UP. Breaking out from a symmetrical triangle will send the REIT index to march towards the minimum target of 970.

 

Fundamental Analysis of 41 Singapore REITs

The following is the compilation of 41 REITs in Singapore with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio. This gives investors a quick glance of which REITs are attractive enough to have an in-depth analysis. DPU Yield for Eagle Hospitality Trust and Prime US REIT are  projection based on the IPO prospectus.  OUE Hospitality Trust is removed after merged into OUE Commercial REIT. Lendlease Global Commercial REIT is not included in this table.

  • Price/NAV increases from 1.06 to 1.07 (Singapore Overall REIT sector is over value now).
  • Distribution Yield reduced from 6.37% to 6.27% (take note that this is lagging number). About 29.3% of Singapore REITs (12 out of 41) have Distribution Yield > 7%.
  • Gearing Ratio reduced from 34.7% to 34.6%.  23 out of 41 have Gearing Ratio more than 35%. In general, Singapore REITs sector gearing ratio is healthy. Note: The current limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45% but there is a consultation paper by SGX to review the potential increase to 50-55% limit.
  • The most overvalue REIT is Keppel DC REIT (Price/NAV = 1.80), followed by Parkway Life (Price/NAV = 1.71), Ascendas REIT (Price/NAV = 1.50), Mapletree Industrial Trust (Price/NAV = 1.60), Mapletree Logistic Trust (Price/NAV = 1.38), Frasers Logistic & Industrial Trust (Price/NAV = 1.38), Frasers Centrepoint Trust (Price/NAV=1.30) and Mapletree Commercial Trust (Price/NAV = 1.47)
  • The most undervalue (base on NAV) is Fortune REIT (Price/NAV = 0.53), followed by OUE Comm REIT (Price/NAV = 0.75), Far East Hospitality Trust (Price/NAV = 0.79), Lippo Malls Indonesia Retail Trust (Price/NAV = 0.77) and Eagle Hospitality Trust (Price/NAV = 0.77)
  • The Highest Distribution Yield (TTM) is SoilBuild BizREIT (9.66%), followed by Eagle HT (9.41%), , Sasseur REIT (8.56%), EC World REIT (8.42%), Lippo Mall Indonesia Retail Trust (8.43%),  First REIT (8.43%) and Cache Logistic Trust (8.02%).
  • The Highest Gearing Ratio are Far East HTrust (39.8%), ESR REIT (39%),  OUE Comm REIT (39.3%) and SoilBuild BizREIT  (39.4%)
  • Top 5 REITs with biggest market capitalisation are Ascendas REIT ($9.59B), CapitaMall Trust ($9.51B), Capitaland Commercial Trust ($7.69B), Mapletree Commercial Trust ($6.77B) and Mapletree Logistic Trust ($5.85B)
  • The bottom 3 REITs with smallest market capitalisation are BHG Retail REIT ($345M), Sabana REIT ($469M) and iREIT Global REIT ($490M)

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. To learn how to use the table and make investing decision, Sign up next REIT Investing Workshop here to learn how to choose a fundamentally strong REIT for long term investing for passive income generation.

 

  • 1 month decreases from 1.87916% to 1.87633%
  • 3 month increases from 1.87933% to 1.87958%
  • 6 month stays at 1.93842%
  • 12 month stays at 2.12400%

 

Summary

Fundamentally the whole Singapore REITs is over value now based on simple average on the Price/NAV. The big cap REITs are getting quite expensive and the distribution yield are not attractive historically and most of the DPU yield for big cap REIT is below 5% now. This is the first time in my REIT investing journey seeing the distribution yield for Singapore REITs such as Mapletree Commercial Trust and Keppel DC REIT drop below 4%! However, the yield remains attractive compared to other fixed income asset classes like corporate bonds and government bonds.

The yield spread between big cap and small cap REIT remains wide. This indicates value picks only in small and medium cap REITs.

Yield spread (reference to 10 year Singapore government bond of 1.657%) has tightened from 4.665% to 4.613%.  The risk premium for small cap REIT is very attractive as compared to big cap REITs.

 

Technically, the REIT index continues the bullish uptrend and currently taking a pause. REIT index continues to outperform STI and the financial sectors due to the following 3 macro factors (1) low interest rate environment (2) potential relax of gearing ratio to 50-55% limit (3) TINA (There Is No Alternative) for other high yield asset classes. The positive sentiment may entice Singapore REITs to take on more debt to grow the current portfolio.

 

My next Singapore REIT investing course is planned on Nov 30, 2019 (last class in 2019). Registration detail can be found at following link. https://mystocksinvesting.com/course/singapore-reits-investing/

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Who Are Day Traders & Should You Be One

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Author: Louise Andrea Jimera

 

Traders. When you hear this word, you instantly think up an image of two types of people: One that is wearing a business suit while on a tropical vacay with a drink in hand (however inappropriate) and the other looking like a chronic couch potato in his boxers watching Netflix.

 

 

 

Why is this so?

People have different idealizations of traders, you see. Some tend to think that people who aspire to become traders want a life bigger than what they have now. And who wouldn’t? I’m pretty sure that if you were given a chance to live a completely different life than you have now, you too will have second thoughts. To dream big and actually become big is an accomplishment worthy of praise. And for many people, they believe that trading is there ticket to success.

Another perception of people who claim to be “traders” is that they’re nothing but a bunch of unemployed individuals (who also refuse to be employed, btw) and is looking for a shortcut to success. This really puts traders in a bad spot as their reputation is viewed incorrectly. Check this out: https://www.investopedia.com/articles/active-trading/013015/worst-mistakes-beginner-traders-make.asp.

The reason why there are two completely different perceptions of traders in the first place is because it’s true. Some people are getting into the activity in order to bring change into their lives – even if it means working really, really hard at it – while others tend to make trading an excuse for lazy and complacent lifestyle. Among these two different types of people, we are hoping that you are the first one – a person with a real drive for financial freedom. You know why? It’s because trading, when done for the right reasons, can really change your life for the better.

Still, it wouldn’t work for a Mr. Lazy Pants though.

What Makes A Real Trader

Trading is not for everyone (read more). Even if lots and lots of people take an interest in trading (like back in 2010 when the internet was crazed over Bitcoin), it doesn’t mean that they can all be traders. To become one, you need to have patience, perseverance, and the right skill set to make meaningful financial decisions. If you do it half-heartedly and haphazardly, you’re in for terrible financial losses. This is why many so-called “traders” go bankrupt as soon as they start trading real money.

First off, you have to be willing to learn. Whether it be the stock or cryptocurrency market that you’re planning on entering, fact of the matter is that you will need to invest a significant amount of time and effort to familiarize yourself with market activity. If you think you have these kinds of attributes, then I guess that prequalifies you to become a trader. At the very least, you would have the aptitude to become one.

What comes next is just hard work and patience. If you simply rely on trading software and not learn how to deal with these kinds of negotiations yourself, you’ll end up digging your own financial grave. I mean, sure there are many promising software out there but if you really want to be on top of your game, you have to get in the game – understand? Also, you have to be clear on what kind of trader you’re going to be.

You basically have two options: Day or Swing Trader.

 

Day Trading VS Swing Trading

This is not really gibberish; it’s quite easy to spot the difference between these two types of traders. If you choose to “day trade,” this means that you acquire and dispose of stocks or currencies in a period of 24 hours. Trading Review can also provide you good input on this topic.

Say, you start by investing $500 into stocks. You let it roll for the next couple of hours and sell them off when you think the time is right, and maybe earn yourself a little profit on the side. As you may already guess, in day trading, there are good days and bad days. There are times when you make right purchases and you get to bring home the bacon. Other times, you sell off what you have for less than what you bought them for. I guess it’s just all in a day’s work.

Now, swing trading is a little different. This is the kind of trade you do when you don’t really have any plans for your money yet – so you invest it in stocks or currencies (or both). And instead of selling them off after just a couple of hours, you let them sit for a while. Most people would go several months at a time. This gives your investment more time to grow and assuming that you’ve partnered with a company with promising growth, your stocks are bound to increase in value over time.

 

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Lendlease Global Commercial REIT IPO Prospectus and Summary

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Overview of Lendlease Global Commercial REIT

Lendlease Global Commercial REIT (“Lendlease Global REIT”) is a Singapore real estate investment trust (“REIT”) established with the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of stabilised income-producing real estate assets located globally that are used primarily for retail and/or office purposes as well as real estate-related assets in connection with the foregoing. The Manager is Lendlease Global Commercial Trust Management Pte. Ltd., an indirect wholly-owned subsidiary of the Sponsor

Lendlease Global Commercial REIT IPO Listing in Singapore

 

  • Type = Commercial + Retail Malls
  • Sponsor = Lendlease Corporation Limited. (Sponsor will subscribe about 27.2% of the total units.)
  • Total Units Offered = 387,474,987 units (to raise S$341.0 Million)
  • Portfolio = 1 retail property in Singapore (71.5%); 1 commercial office property (Grade A Freehold) in Milan, Italy (28.5%)
  • Portfolio Size = S$1.403 Billion
  • IPO Offer Price = S$0.88
  • NAV per unit = S$0.8134
  • Price / NAV = 1.082
  • Distribution Yield = 5.8% (2020), 6.0% (2021)
  • Distribution Policy = 100% for 2020 & 2021. At least 90% thereafter. Semi Annual Payout.
  • Occupancy Rate = 99.9%
  • WALE = 4.9 Years
  • Gearing Ratio = 36.4%
  • WADM = 3.8 Years
  • Offer Closing Date: Sep 30, 2019, 12pm
  • Listing Date: Oct 2, 2019, 2pm
  • Lendlease Global Commercial REIT IPO Prospectus

PORTFOLIO

 

TENANT / SECTOR DIVERSIFICATION

LEASE EXPIRY PROFILE

INCOME PROJECTION

TRUST STRUCTURE

INDICATIVE TIME TABLE

 

Compare to other Singapore REITs here.

 

If you need an independent professional review on your current REIT portfolio and need any recommendation, you may engage me in the REIT portfolio Advisory. REITs Portfolio Advisory.  https://mystocksinvesting.com/course/private-portfolio-review/

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