2 Things That Investors Should Know CapitaLand Commercial Trust Now
- Original Post from The Motley Fool Sg

CapitaLand Commercial Trust (SGX: C61U) is one of the largest commercial real estate investment trusts (REITs) in Singapore by market capitalisation that is managed by CapitaLand Limited (SGX: C31).The REIT has ownership over nine commercial properties in Singapore and one property in Germany.

There are two things to know about the REIT right now: its latest financial performance and valuation.

Financial performance

Here is a table showing important items from CapitaLand Commercial Trust’s financial performance for the third quarter of financial year ending 31 December 2018.

Source: CapitaLand Commercial Trust Results Presentation

The year-on-year improvements in gross revenue and net property income (NPI) were due to strategic acquisitions of Asia Square Tower 2 and Gallileo (the property in Germany), but partially offset by the divestments of Wilkie Edge and Twenty Anson. As at 30 September 2018, the commercial REIT had a gearing ratio of 35.3% while its occupancy rate stood at 99.2%.

In all, CapitaLand Commercial Trust had a good quarter with stronger metrics across the board.


There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows CapitaLand Commercial Trust’s PB ratio and distribution yield. It also shows the respective averages of the two valuation metrics for the 41 REITs that are in Singapore’s stock market.

Source: SGX StockFacts

We can see that CapitaLand Commercial Trust’s valuation is higher than the market average due to its low distribution yield and its high PB ratio.

$CapitaLand(C31.SI) $CapitaMall Trust(C38U.SI)

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I'm rather pleased with my investment in this Reit. Over the past 6 years, it has given me an average return of 11.6%, not too shabby for a self-taught amateur...

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2018’s Top 5 Performing Blue-Chips
- Original Post from The Motley Fool Sg

Singapore’s Strait Times Index (SGX: ^STI) has had a rough 2018, falling 9.1% from the start of the year until the end of November. Despite the market’s tantrums, not all blue-chip stocks have performed badly. With that in mind,let’s look at the top five performing companies and the returns they have provided to investors this year (data as of 30 November 2018):

  1. Dairy Farm International Holdings Ltd (SGX: D01) is a member of the Jardine group of companies. Dairy Farm’s is a pan-Asian retailer that operates supermarkets, hypermarkets, convenience stores, health and beauty stores, and home furnishing stores. Some of the familiar brand names under the company’s portfolio are Giant, Guardian, and Cold Storage. Dairy Farm is the top performing stock on the STI this year, delivering a return of 14.8% up till the end of November. At current prices, Dairy Farm has a market capitalization of US$8.9 billion and a dividend yield of 2.3%.

  2. Singapore Technologies Engineering Ltd (SGX: S63) is an integrated engineering group with business interests in the aerospace, electronics, land systems and marine sectors with a presence in over 100 countries. The company has a market capitalization of S$10.8 billion and offers a dividend yield of 4.3%. For the year to date, ST Engineering posted returns of 13.7%, placing it at the second position.

  3. The third best performer is Capitaland Mall Trust (SGX: C38U). The real estate investment trust owns 16 malls all around the Lion City. CapitaLand Mall Trust is also the largest REIT in Singapore with a market capitalization of S$8.4 billion. Over the last eleven months, Capitaland Mall’s total returns was a solid 12.3%. At current stock prices, the REIT’s distribution yield is a respectable 4.9%.

  4. Next on the list isJardine Matheson Holdings Limited (SGX: J36). The conglomerate has diversified business interests in multiple industries such as property, retailing, and luxury hotels, motor vehicles, engineering & construction, transport, and insurance broking. At its current stock price, Jardine Matheson has a market capitalization of US$15.2 billion and a dividend yield of 2.4%. For the first 11 months of 2018, the conglomerate has delivered an 11.5% return to shareholders.

  5. ComfortDelGro Corporation Limited (SGX: C52) is one of the largest land transport companies in the world with a presence in seven countries. The transport operator has a global network of over 43,000 vehicles. Within the transport sector, ComfortDelGro has businesses in the taxi, bus, rail, car rental, and automotive engineering services. The company’s stock is currently trading at a market capitalization of S$4.6 billion and sports a dividend yield of 4.9%. For the year so far, ComfortDelGro has returned 11% to investors, placing it at number five of the top performing blue-chips.

The five blue-chip companies above have bucked the trend and posted positive returns even as the STI declined. While the period is only 11 months, the company above demonstrate that picking the right stocks can deliver positive returns during turbulent markets. That is why it’s essential that investors put in the time and effort to research stocks before taking the plunge.

$STI(^STI.IN) $CapitaMall Trust(C38U.SI) $ComfortDelGro(C52.SI) $DairyFarm USD(D01.SI) $JMH USD(J36.SI) $ST Engineering(S63.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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3 Singapore-Listed Dividend Companies That Are Perfect For Retirement
- Original Post from The Motley Fool Sg

Companies which are ideal to buy during retirement generally have strong businesses and excess cash to dole out to shareholders as dividends. With this in mind, let’s look at three Singapore-listed stocks that could give you a steady stream of dividend income in your golden years.

Company #1

VICOM Limited (SGX: V01) is a leading provider of technical testing and inspection services in Singapore. In 2017, the company had a 74.5% share of the vehicular testing market in our Garden City.

From 2013 to 2017, VICOM managed to grow its total dividend (including special dividends) at a remarkable annual rate of 12.5% from S$0.225 per share to S$0.36 per share. In the second quarter of 2017, VICOM adjusted its dividend policy to payout at least 90% of its net profit as a dividend; the previous ratio was 50%.

VICOM also raised its interim dividend by 2.6% from S$0.1312 per share in 2017’s second quarter to S$0.1346 per share in 2018’s second quarter. At VICOM’s share price of S$6.02 currently, the company has a trailing dividend yield of 6%.

Company #2

Next up is CapitaLand Mall Trust (SGX: C38U), the largest retail real estate investment trust (REIT) by market capitalisation in Singapore’s stock market. The REIT owns 15 shopping malls in Singapore, including Tampines Mall, Junction 8, and Plaza Singapura. REITs are required to pay out at least 90% of their taxable income to unitholders as distributions to enjoy tax benefits. As such, REITs typically have high distribution yields and are thus popular among retirees.

CapitaLand Mall Trust’s distribution per unit (DPU) has increased by 2.1% per year from S$0.1027 in 2013 to S$0.1116 in 2017. In the third quarter of 2018, the RETI’s DPU rose 5% year-on-year to S$0.0292. There is potential for more DPU growth for CapitaLand Mall Trust with the opening ofFunan in the second quarter of 2019; Funan is going to be Singapore’s shopping centre first online-and-offline shopping centre.

CapitaLand Mall Trust’s unit price is at S$2.22 right now, giving the REIT a trailing distribution yield of 5.1%.

Company #3

Singapore Exchange Limited (SGX: S68), or SGX in short, is the final company on my list. The company is the only stock market operator in Singapore and it provides listing, trading, clearing, settlement, depository, and data services.

SGX’s dividend has grown from S$0.28 per share in its fiscal year ended 30 June 2014 (FY2014) to S$0.30 per share in FY2018, which translates to an annual growth rate of 1.7%. To know more about the local bourse operator’s dividend, such as its dividend history, dividend policy, and dividend sustainability, you can head here.

At SGX’s current share price of S$7.22, the bourse operator has a trailing dividend yield of 4.2%.

$CapitaMall Trust(C38U.SI) $SGX(S68.SI) $VICOM(V01.SI)

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Which Blue-Chip Property Developer Is The Cheapest Now?
- Original Post from The Motley Fool Sg

Property stocks took a beating in July when the Singapore government implemented additional property cooling measures. Since then, private condominium prices have declined for two straight months, and analysts expect further corrections in the months ahead.

That said, I still believe the long-term prospects of property in Singapore remains sound. The Monetary Authority of Singapore has said that it wants property prices to rise reasonably and in tandem with wage increases. As such, over the much longer time frame, property prices should increase as wages rise in Singapore.

With property stocks trading some way off their peak, now may be a good time to look for bargains. Here’s a quick look at how the three blue-chip property stocks are valued now.

Price-to-book ratio

The price-to-book ratio is a comparison between the price of a stock and its book value per share. In theory, a stock that is trading at a discount to its book value can pose good value. If a company liquidates its assets and returns the cash to shareholders, investors stand to gain from the price-book value mismatch.

The three property stocks that are part of the Straits Times Index (SGX: ^STI)UOL Group Limited (SGX: U14), CapitaLand Limited (SGX: C31) and City Developments Limited (SGX: C09) – each trade below their book values. The table below shows the price-to-book ratios of the three companies right now.

Source: Author’s compilation and computation of data from Morningstar

As you can see, all three property stocks are trading well below their book values and also below their five-year average. On average, they are selling at a 21.8% discount to their respective averages, with City Developments currently trading at the biggest discount compared to its past.

UOL, however, has the lowest price-to-book ratio currently.

The Foolish bottom line

Clearly, the market does not seem to like Singapore property stocks right now. There is minimal visibility on how the property market in Singapore will move over the next few quarters, and the government has shown that it is not afraid to step in to cool the market if optimism goes out of hand.

However, over the longer time frame, properties in Singapore are most likely going to appreciate as population and wages grow. The long-term fundamentals are intact for these three companies that own, manage and develop properties in Singapore and regionally. With prices well below their historical average, now may be an opportune time to get in cheap.

$CityDev(C09.SI) $CapitaLand(C31.SI) $UOL(U14.SI)

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3 Billion Dollar REITs That Are Trading Close To Their 52-Week Lows
- Original Post from The Motley Fool Sg

One of the more popular types of investments in Singapore is the real estate investment trust (REIT).

Due to the structure of REITs, they are required to pay out most of their taxable income to their unitholders; this results in them offering high distribution yields for investors. Moreover, since we’re currently in a relatively low interest rate environment, REITs, with their high yields, would seem like an attractive avenue for investors to earn income.

But, not every REIT would be a good investment. And with around 41 REITs and stapled trusts (trusts that consist of a REIT and a business trust) in our local stock market, it’s important that investors attempt to separate the wheat from the chaff. So, where should we start in our hunt for potential investing opportunities amongst REITs?

In my case, I would start by looking at REITs that are trading at prices close to a 52-week low. From such a list, I would then carry on further research to understand each REIT’s property profile, financials, management-calibre, and future prospects.

Let’s take a closer look at three REITs that currently have unit prices that are near their respective 52-week lows: Parkway Life REIT (SGX: C2PU), SPH REIT (SGX: SK6U), and CapitaLand Retail China Trust (SGX: AU8U).

Source: SGX StockFacts

The first REIT here is Parkway Life REIT. As a quick background, Parkway Life REIT is one of the largest listed REITs in Asia by asset size.

For the quarter ended 30 September 2018, Parkway Life REIT reported that gross revenue grew 2.5% to S$28.4 million while net property income (NPI) improved by 2.5% to S$26.5 million as compared to the same period last year. The higher NPI was due to contribution from one nursing rehabilitation facility acquired in February 2018 and higher rent from the Singapore properties. Yet, distribution per unit (DPU) declined by 4.1% to 3.23 cents. Excluding one off distribution of divestment gains last year, DPU would have increased by 2.7%.

As of 30 September 2018, the REIT’s gearing stood at 37.7% and its committed occupancy rate was 100%.

Yong Yean Chau, chief executive of the REIT’s manager, commented:

“We remain committed in preserving the resiliency of our earnings within this environment of rising interest rates and market uncertainties. In the past quarter, we have successfully refinanced all loans due in 2019 as part of our liquidity risk management strategy and continued to manage our exposure to interest rate and foreign currency risks. This has been done to enhance the defensiveness of PLife REIT’s balance sheet, to safeguard the stability and resiliency of our distributions to Unitholders.”

The next REIT on the list is SPH REIT. As a quick introduction, SPH REIT is an owner of two retail malls in Singapore, namely, Paragon and The Clementi Mall. Newspaper publisher Singapore Press Holdings Limited (SGX: T39) is the sponsor, manager, and a large unitholder of SPH REIT.

For the quarter ended 31 August 2018, SPH REIT reported that gross revenue grew marginally by 0.2% year-on-year to S$53.0 million while NPI fell by 1.9% to S$41.0 million. DPU was up by 0.7% as compared to a year ago to 1.43 cents. On 28 June 2018, SPH REIT completed the acquisition of The Rail Mall for around S$63.2 million.

As of 31 August 2018, the REIT’s gearing stood at 26.3%, which is a safe distance from the regulatory ceiling of 45%.

Susan Leng, chief executive of the SPH REIT’s manager, said:

“SPH REIT has delivered yet another year of consistent returns to our unitholders and our well-positioned assets continued its track record of close to full occupancy. The resilient performance for five years since listing in 2013 amid retail sales downturn, is a testament to our long-standing philosophy of partnership with our tenants for mutual success. We are pleased that our tenants have registered higher sales and lower occupancy cost.”

The last REIT that we will explore here is CapitaLand Retail China Trust, or CRCT.As a quick introduction, CRCT is a Singapore-based REIT investing in retail real estate in China.

For the quarter ended 30 September 2018, CRCT reported that gross revenue declined 1.1% to S$55.4 million while NPI increased by 2.2% to S$36.7 million. The higher NPI was due to lower property expenses. Similarly, DPU grew 1.7% year-on-year to 2.41 cents. As of 30 September 2018, the REIT’s gearing came in at 35.9% while its committed occupancy rate stood at 97.7%.

Tan Tze Wooi, chief executive of CRCT’s manager, commented in the earnings update:

“CRCT’s growth in 3Q 2018 extends the positive momentum from our portfolio reconstitution. Portfolio occupancy as at 30 September 2018 was a healthy 97.7% and rental reversion for the quarter was a robust 12.1%. Our active asset management strategy with a tailored approach for each mall is progressing well. Rock Square registered a strong positive rental reversion above 20% for the third consecutive quarter by bringing in 25 prominent international and domestic brands, many of which are new-to-market in Haizhu District. To differentiate CapitaMall Qibao’s offerings, we increased its exposure to the resilient learning and education sector by more than three times over the last five years. We also expanded the rooftop playground to host more interactive activities that are popular with children, further enhancing CapitaMall Qibao’s attractiveness to young families.”

$CapitaR China Tr(AU8U.SI) $ParkwayLife Reit(C2PU.SI) $CapitaLand(C31.SI) $SPHREIT(SK6U.SI) $SPH(T39.SI)

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