Monday, March 2, 2015

Doing some REIT thinking

Of late, 2 REITs are looking particularly interesting to me based of their fugly ass charts.

They are none other than Sabana REIT and Far East H Trust.

Sabana REIT is an industrial REIT with an NAV of $1.04, but trading at $0.92, which translates into a discount of 11.5%. Sabana yields 7.6%.

Far East H Trust is a hospitality REIT with an NAV of $0.97, but trading at $0.81, which translates into a discount of 16.5%. Far East H Trust yields 6.3%.

Of course, P/B isn't the best and only indicator in the world that we can and should use, but I think that they make very compelling candidates for deeper analysis.

Moving forward with my REIT analysis, one of the things that I will be studying to see if it is useful is the REIT expenses to see how efficient is the management in running the REITs. I see a very strong focus on increasing revenues, but much less focus on controlling expenses. Is this an area that many people overlook? I imagine that the expense % would be clustered based on the different type of REIT sectors, but without actual research, it is only a hypothesis. The best case scenario would be to find out that property expenses are comparable across the board, but I think that is unlikely.

Along with reading up extensively on real estate in Singapore (preparing for my own future purchase), trimming down my watchlist and writing long ranty posts about my market musings, I will be adding this task to my horrendously long list of things to do.

I still have stacks of books to go through and *gasp* a social life.

A lot of people tell me that adult working life is extremely dull and boring. I have no idea what these people are talking about and I am totally unable to relate to them.

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