3 REITS That Have More Than 8% Yield Right Now
- Original Post from The Motley Fool Sg

Real estate investment trusts, or REITs, are popular investment choices on the Singapore stock market. That’s because REITs tend to have high distribution yields due to their need to distribute at least 90% of their taxable income to unitholders in order to enjoy tax transparency.


In this article, I will share with you three REITs that are trading at high distribution yields of more than 8%.



Source: SGX StockFacts


We will start with Cache Logistics Trust (SGX: K2LU).As a quick background, Cache Logistics Trust is a real estate investment trust that focuses on logistics properties. It currently has 27 logistics warehouse properties in its portfolio which are located in Singapore, Australia, and China.


In the quarter ended 30 September 2018, Cache Logistics Trust reported that gross revenue grew 14.8% to S$31.5 million while net property income increased by 8.1% to S$23.1 million. The improvement was driven by higher contribution from existing properties and latest acquisitions. Yet, the REIT’s distribution per unit (DPU) was down by 4.3% year-on-year to 1.475 cents, mainly due to lower income for distribution and issue of new units.


As of 30 September 2018, the REIT’s gearing stood at 35.6% and its committed occupancy rate was 96.9%.


Next, we have First Real Estate Investment Trust (SGX: AW9U).As a quick introduction, First REIT is a healthcare-focused REIT with a portfolio of 20 properties (16 in Indonesia, three in Singapore, and one in South Korea). The REIT’s sponsor is Indonesia’s largest listed property company, PT Lippo Karawaci Tbk.


For the quarter ended 30 September 2018, First REIT reported that gross revenue climbed 5.1% while NPI improved 5.4%, respectively, as compared to the same period last year. The improvement was primarily due to contributions from the newly-acquired Siloam Hospitals Buton & Lippo Plaza Buton, and Siloam Hospitals Yogyakarta, as well as increased rental income from existing properties. Consequently, the REIT’s DPU came in at 2.15 cents, 0.5% higher than the same period last year.


Victor Tan, chief executive of First REIT’s manager, made the following comments:


“Contributions from our latest acquisitions and existing properties continued to bolster the Trust’s revenue and NPI in the third quarter. The proposed acquisition of Bowsprit by OUE Lippo Healthcare Limited will be one of our growth drivers. First REIT will then be able to access a more diversified pool of assets via the right of first refusal agreements granted by both OUE Lippo Healthcare Limited and PT Lippo Karawaci Tbk for their portfolios. This will effectively expand First REIT’s geographical catchment within Asia, allowing the Trust to potentially pursue more yield-accretive acquisitions to deliver stable returns to our Unitholders.”


First REIT recently saw its unit price decline by a substantial amount. For those who wish to know more about the development, you can headhere.


Last but not the least, we have EC World Real Estate Investment Trust (SGX: BWCU), or EC World REIT.As a quick introduction, EC World REIT is the first Chinese specialized logistics and e-commerce logistics REIT. It owns properties mainly used for e-commerce, supply-chain management and logistics.


For the quarter ended 30 September 2018, EC World REIT reported that gross revenue came in 0.1% higher year-on-year to S$23.9 million while NPI grew by 0.5% year-on-year to S$ 22.2 million. Similarly, the REIT’s DPU was up by 9.0% as compared to last year to 1.57 cents. EC World REIT’s DPU benefited from lower expenses and the absence of a 5% withholding tax that was charged in 2017’s third quarter. If the impact from the withholding tax is removed, EC World REIT’s year-on-year DPU growth in 2018’s third quarter would be 2.3%.


As of 30 September 2018, the REIT’s gearing was 30.7% and its committed occupancy rate stood at 99.2%.


Goh Toh Sim, CEO of EC World REIT’s manager, shared the following comments on the REIT’s outlook:


“We are delighted to deliver another quarter of healthy distributions for our unitholders despite the macroeconomic headwinds and global uncertainty. EC World REIT’s assets are generally unaffected as the tenants within the portfolio serve primarily the domestic China market focused on domestic consumption. As such, we do not expect the ongoing global uncertainty to have a material negative impact on the operation of our assets.”


Conclusion


So there you go, three REITs that are trading at high yields of 8%. Investors should be reminded, however, that high yields alone are not enough to justify a buy decision. Thus, it is important the investors do their research on the trust’s future income prospects before committing any capital.


$First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $Cache Log Trust(K2LU.SI)

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The Top 3 Yielding REITs in Singapore Now
- Original Post from The Motley Fool Sg

Last month, investors in Singapore saw one of the steepest sell-offs of a real estate investment trust (REIT) in recent memory.


First Real Estate Investment Trust (SGX: AW9U) slid more than 10% in just two days as reports about the financial health of its main tenant, Lippo Karawaci Tbk PT spooked investors.


REITs are often considered more stable investments than stocks because their rental income is usually more consistent and they tend to have fewer business risks than traditional companies. Because of these reasons, a large decline in a REIT’s unit price, such as First REIT’s, is a rare occurrence.


That being said, the decline in price now means that investors who are willing to take some risks with First REIT can buy in at a much lower price. As the yield of a REIT is a function of its price, it also means that investors who buy now will also enjoy a much higher distribution yield than if they had bought it just a week earlier. First REIT now sports the fifth highest yield among REITs in Singapore.


With that in mind, I thought it would be useful to give investors a list of the top three REITs with the highest year-to-date annualised yields in Singapore.



Lippo Malls Indonesia Retail Trust (SGX: D5IU)


Top on the list is another REIT that is linked to Lippo Karawaci. Like First REIT, Lippo Malls Indonesia Retail Trust has fallen hard in recent months. Year-to-date, the REIT has shed more than 40% of its value amid concerns over its sponsor.


The falling Indonesian Rupiah has not helped either and is another factor that has caused distributions to be lower for local investors.


Lippo Malls Indonesia Retail Trust currently has an annualised yield of 12%.



Cache Logistics Trust (SGX: K2LU)


With an annualised yield of 9%, Cache Logistics Trust comes in at second place. It invests primarily in logistics warehouse properties located in Singapore, Australia, and China.


The trust has been suffering from higher foreign exchange losses this year, largely due to the weaker Australian dollar. Consequently, its net income has slid 7.1% between January to September this year, compared to last year. Its distribution per unit has also declined 12%, which has resulted in its unit price falling almost 20% so far this year.



EC World Real Estate Investment Trust (SGX: BWCU)


Third on this list is EC World REIT with its annualised yield of 8.8%. It invests in specialised and e-commerce logistics properties in China. So far this year, the REIT has been doing well with gross revenue and distributable income up 2.9% and 3.0% respectively. It made its first acquisition last year, expanding its property count to seven, which was part of the reason for the improved performance this year.


The Foolish bottom line


Fears of rising interest rate and geopolitical risk have caused a broad market sell-off this year. The falling stock market has resulted in REITs in Singapore currently sporting much higher yields than they did last year.


That being said, the yield of a REIT is not the only aspect that investors should look out for. What is perhaps more important is the stability of distributions and whether the REIT can grow over time. Investors should consider things like concentration risk, gearing, and interest cover when assessing the stability and growth potential of a REIT.


$First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $Lippo Malls Tr(D5IU.SI) $Cache Log Trust(K2LU.SI)

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The Top 3 Yielding REITs in Singapore Now
- Original Post from The Motley Fool Sg

Last month, investors in Singapore saw one of the steepest sell-offs of a real estate investment trust (REIT) in recent memory.


First Real Estate Investment Trust (SGX: AW9U) slid more than 10% in just two days as reports about the financial health of its main tenant, Lippo Karawaci Tbk PT spooked investors.


REITs are often considered more stable investments than stocks because their rental income is usually more consistent and they tend to have fewer business risks than traditional companies. Because of these reasons, a large decline in a REIT’s unit price, such as First REIT’s, is a rare occurrence.


That being said, the decline in price now means that investors who are willing to take some risks with First REIT can buy in at a much lower price. As the yield of a REIT is a function of its price, it also means that investors who buy now will also enjoy a much higher distribution yield than if they had bought it just a week earlier. First REIT now sports the fifth highest yield among REITs in Singapore.


With that in mind, I thought it would be useful to give investors a list of the top three REITs with the highest year-to-date annualised yields in Singapore.



Lippo Malls Indonesia Retail Trust (SGX: D5IU)


Top on the list is another REIT that is linked to Lippo Karawaci. Like First REIT, Lippo Malls Indonesia Retail Trust has fallen hard in recent months. Year-to-date, the REIT has shed more than 40% of its value amid concerns over its sponsor.


The falling Indonesian Rupiah has not helped either and is another factor that has caused distributions to be lower for local investors.


Lippo Malls Indonesia Retail Trust currently has an annualised yield of 12%.



Cache Logistics Trust (SGX: K2LU)


With an annualised yield of 9%, Cache Logistics Trust comes in at second place. It invests primarily in logistics warehouse properties located in Singapore, Australia, and China.


The trust has been suffering from higher foreign exchange losses this year, largely due to the weaker Australian dollar. Consequently, its net income has slid 7.1% between January to September this year, compared to last year. Its distribution per unit has also declined 12%, which has resulted in its unit price falling almost 20% so far this year.



EC World Real Estate Investment Trust (SGX: BWCU)


Third on this list is EC World REIT with its annualised yield of 8.8%. It invests in specialised and e-commerce logistics properties in China. So far this year, the REIT has been doing well with gross revenue and distributable income up 2.9% and 3.0% respectively. It made its first acquisition last year, expanding its property count to seven, which was part of the reason for the improved performance this year.


The Foolish bottom line


Fears of rising interest rate and geopolitical risk have caused a broad market sell-off this year. The falling stock market has resulted in REITs in Singapore currently sporting much higher yields than they did last year.


That being said, the yield of a REIT is not the only aspect that investors should look out for. What is perhaps more important is the stability of distributions and whether the REIT can grow over time. Investors should consider things like concentration risk, gearing, and interest cover when assessing the stability and growth potential of a REIT.


$First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $Lippo Malls Tr(D5IU.SI) $Cache Log Trust(K2LU.SI)

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The Top 3 Yielding REITs in Singapore Now
- Original Post from The Motley Fool Sg

Last month, investors in Singapore saw one of the steepest sell-offs of a real estate investment trust (REIT) in recent memory.


First Real Estate Investment Trust (SGX: AW9U) slid more than 10% in just two days as reports about the financial health of its main tenant, Lippo Karawaci Tbk PT spooked investors.


REITs are often considered more stable investments than stocks because their rental income is usually more consistent and they tend to have fewer business risks than traditional companies. Because of these reasons, a large decline in a REIT’s unit price, such as First REIT’s, is a rare occurrence.


That being said, the decline in price now means that investors who are willing to take some risks with First REIT can buy in at a much lower price. As the yield of a REIT is a function of its price, it also means that investors who buy now will also enjoy a much higher distribution yield than if they had bought it just a week earlier. First REIT now sports the fifth highest yield among REITs in Singapore.


With that in mind, I thought it would be useful to give investors a list of the top three REITs with the highest year-to-date annualised yields in Singapore.



Lippo Malls Indonesia Retail Trust (SGX: D5IU)


Top on the list is another REIT that is linked to Lippo Karawaci. Like First REIT, Lippo Malls Indonesia Retail Trust has fallen hard in recent months. Year-to-date, the REIT has shed more than 40% of its value amid concerns over its sponsor.


The falling Indonesian Rupiah has not helped either and is another factor that has caused distributions to be lower for local investors.


Lippo Malls Indonesia Retail Trust currently has an annualised yield of 12%.



Cache Logistics Trust (SGX: K2LU)


With an annualised yield of 9%, Cache Logistics Trust comes in at second place. It invests primarily in logistics warehouse properties located in Singapore, Australia, and China.


The trust has been suffering from higher foreign exchange losses this year, largely due to the weaker Australian dollar. Consequently, its net income has slid 7.1% between January to September this year, compared to last year. Its distribution per unit has also declined 12%, which has resulted in its unit price falling almost 20% so far this year.



EC World Real Estate Investment Trust (SGX: BWCU)


Third on this list is EC World REIT with its annualised yield of 8.8%. It invests in specialised and e-commerce logistics properties in China. So far this year, the REIT has been doing well with gross revenue and distributable income up 2.9% and 3.0% respectively. It made its first acquisition last year, expanding its property count to seven, which was part of the reason for the improved performance this year.


The Foolish bottom line


Fears of rising interest rate and geopolitical risk have caused a broad market sell-off this year. The falling stock market has resulted in REITs in Singapore currently sporting much higher yields than they did last year.


That being said, the yield of a REIT is not the only aspect that investors should look out for. What is perhaps more important is the stability of distributions and whether the REIT can grow over time. Investors should consider things like concentration risk, gearing, and interest cover when assessing the stability and growth potential of a REIT.


$First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $Lippo Malls Tr(D5IU.SI) $Cache Log Trust(K2LU.SI)

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Which of These China-Focused REIT Is the Cheapest Now?
- Original Post from The Motley Fool Sg

2018 has not been kind to investors of real estate investment trusts (REITs). Interest rate hikes, the ongoing trade conflict in China, and the volatility in emerging market currencies have all contributed to the negative investor sentiment this year.


However, for long-term investors, depressed prices are not necessarily a bad thing. Lower prices mean that investors who are in it for the long haul can find good quality shares at bargain prices.


In this article, I will take a look at three China-based REITs — CapitaLand Retail China Trust (SGX: AU8U), Sasseur Real Estate Investment Trust (SGX: CRPU), EC World Real Estate Investment Trust (SGX: BWCU) to compare which has the most attractive valuation right now.


Price-to-book ratio


Benjamin Graham, author of TheIntelligent Investor and Warren Buffett’s mentor, was a firm believer of buying stocks that traded below their book values. In theory, buying a stock or REIT that sells below its book value is like buying an asset at a price below its resale value. Investors could profit when the market realises the discrepancies between value and price or when the REIT decides to sell its assets and distribute the returns to unitholders. The table below shows the current price-to-book ratio of the three REITs as of 7 December 2018.



Source: Author’s compilation of data from Morningstar and SGX Stockfacts


CapitaLand Retail China Trust and EC World REIT are both trading below their price-to-book ratios compared to last year. Sasseur REIT was listed earlier this year and is also trading at around 15% discount to its initial public offering (IPO) price.


It is also worth highlighting that EC World REIT, with its price-to-book ratio of 0.79, has the lowest price-to-book ratio among the three.


Distribution yield


The distribution yield is another important valuation metric. As REITs are required to pay out at least 90% of their distributable income to unitholders, the distribution yield provides investors with a good idea of how cheap a REIT is relative to its earnings.



Source: Author’s compilation of data from Morningstar and SGX Stockfacts


As shown, both EC World REIT and Sasseur REIT offer an equally high distribution yield of 8.8%, while CapitaLand Retail China Trust has a 7.3% yield.


The Foolish bottom line


Based on observations about its price-to-book ratio and distribution yield, EC World REIT currently has the most attractive valuation. That said, the two valuation metrics are just a small aspect of a REIT. It is also important to see the robustness of its balance sheet, capabilities of its management, capacity for organic growth and other factors to get a wholesome idea of whether a REIT can make a good investment. Only through a thorough analysis of each of these factors will we get a better idea of which REIT has the highest possibility of market-beating returns.


$CapitaR China Tr(AU8U.SI) $EC World Reit(BWCU.SI) $Sasseur Reit(CRPU.SI)

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The Weekly Nibble: A Focus on Singapore Blue-Chip Shares
- Original Post from The Motley Fool Sg

Here are some of the most popular articles that have appeared on The Motley Fool Singapore’s website for the week.


3 Singapore Blue-Chip Shares That Warren Buffett Might Like


Ever wanted to invest in stable companies that are part of the Straits Times Index (SGX: ^STI)? Look no further. In this article, I look at three blue-chips that have wide economic moats and why they could make good investments.


Companies discussed in the article: Singapore Exchange Limited (SGX: S68), DBS Group Holdings Ltd (SGX: D05) and SATS Ltd (SGX: S58).


3 REITS That Have More Than 8% Yield Right Now


Lawrence Nga explores three real estate investment trusts (REITs) that have distribution yields of above 8%. They are not excessively valued in terms of their book values as well.


REITs discussed in the article are Cache Logistics Trust (SGX: K2LU), First Real Estate Investment Trust (SGX: AW9U) and EC World Real Estate Investment Trust (SGX: BWCU).


Which Blue-Chip Property Developer Is The Cheapest Now?


With the additional property cooling measures introduced in July this year, shares of property developers have generally not been doing well. For instance, UOL Group Limited’s (SGX: U14) share price has tumbled close to 20% since the cooling measures were put in place.


Jeremy Chia, in his article, investigates which of the trio of property outfits that are part of the Straits Times Index – UOL, CapitaLand Limited (SGX: C31) and City Developments Limited (SGX: C09) – offer the best value amid the tumbling stock prices.


$STI(^STI.IN) $First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $CityDev(C09.SI) $CapitaLand(C31.SI) $DBS(D05.SI) $Cache Log Trust(K2LU.SI) $SATS(S58.SI) $SGX(S68.SI) $UOL(U14.SI)

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