Uncommon Financial Metrics of REITs

Previously, I’ve shared bout Basic Financial Metrics of REITs. This time, I would like to share a few uncommon financial metrics that value against distribution. The reason being is, as a REIT investor, ultimately we are focusing on dividend. In case you ask, I have not done any back test on these metrics. 1) Distribution over Management FeeFormula: Distribution to Unitholders / (Manager’s Base Fee + Performance Fee) This measure how much dividend received for every dollar of management fee paid, the higher the value the better. You could compare whether a REIT manager is charging a high or reasonable fee for...

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Basic Financial Metrics of REITs

For this post, I would like to share some basic financial metrics of REITs, there will be some repetitive metrics from debt profile of REITs. All the information below can be extracted from REITs quarter presentation slide and quarter financial report.1) Distribution per Unit (DPU)  & Dividend YieldDPU = Distribution / Outstanding SharesDividend Yield = DPU / Share Price x 100% DPU is the dividend (in dollar) that investor will receive for every number of share owned. Dividend yield is the dividend % that investor would receive for every $1 of share price. Dividend yield is generally calculated using trailing twelve months (TTM)...

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Diversification Profile of REITs

This is continuous post after debt profile and lease profile of REITs. REITs diversification is a process to reduce risk by investing in multiple income generating sources. Often it is more of qualitative factor in analysis, so how can we measure it? Personally, I quantify it through top income contribution from various sources, the smaller the value, the better. Don’t put all your eggs into one basket 1) Major Sector ContributionSome REITs manage properties from different sectors, you could refer to Sector Contribution Weightage of REITs that I’ve post previously for more detail. Major sector contribution refers to the biggest sector income...

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Monthly Cost and Cash Outflow for Owning a Car in Singapore

After continuous posts about REITs, maybe is time to get back to personal finance topic, this time I will write for car topic. Car is an expensive item to own in Singapore, yet we could still see a lots of cars are on the road. Current COE (Certificate of Entitlement) cost is $ 26k for CAT A and $ 35k for CAT B where the highest COE record is $ 92k for CAT A and $ 96k for CAT B in January 2013. How could one willing to pay for a “certificate” with $ 90k ? For monthly car...

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Lease Profile of REITs

Previously, I’ve shared on what to look out for when assessing debt profile of REITs, this time let’s us look at lease profile of REITs. Unlike debt, leasing information presented by REITs is not standardized across the board. Some REITs would provide information based on NLA (Net Lettable Area), while some based on GRI (Gross Rental Income). This make apple to apple comparison challenging.1) OccupancyWhere to Get: Presentation Slide Occupancy is calculated based on NLA. This value is not applicable to hospitality REITs. Some REITs properties are leased under master lease scheme, in which a lessee rents the whole property....

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Debt Profile of REITs

REITs are highly leverage as compared to normal company. Their debts are non-amortizing type which means that they are only required to pay interests. Principals are normally being refinanced upon maturity, of course will be subjected to bank approval. There are risks associated if debts are not managing well. Below are things to look out for when assessing debt profile of REITs. Understand debt profile of REITs is important 1) Gearing RatioWhere to Get: Presentation Slide Gearing ratio = total debts / total assets. Monetary Authority of Singapore (MAS) impost a 45% gearing limit on REITs, but this is...

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Sector Contribution Weightage of REITs

As per previous topic of How to Create Your Own Basic REITs Screener, there are different type of sector. A lot of REITs have their income generated from different sectors. However, so far I could not find any site mentioned about that, so I’ve decided to consolidate one. DIY provide self-satisfaction As of now, there are 6 sectors in Singapore, which are retail, office, healthcare, hospitality, industrial and logistics. I classified business park under office and data centre under industrial and convention centre under hospitality. I have also separate logistics out from industrial sector, which I do not see anyone...

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How to Create Your Own Basic REITs Screener

Before I start, I would like to share that there are already a few useful websites for REITs screening purpose. Please refer below links:The Fifth PersonMy Stocks Investing JourneyPropertyInvestSGYieldSavvyREITScreener In this case, you may ask why still bother to make our own REIT Screener? To me, first reason would be information verification and second would be customization. Why information verification? Nobody would guarantee on total accuracy and completeness of their data. You could find in all websites above, they have disclaimer stated that there are no warranties to accuracy & completeness on information provided. I could not find disclaimer...

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How to Start Investing in REITs

For people with no investment experience, it is very common to ask: “How to start investing?” This is a very general question, which has no direct answer to it. How about let’s make the question more relevant to this blog, “How to start investing in REITs ?” Well, now the question scope has been narrow down quite a lot, hasn’t it? If you have not read my previous post on “What to Consider before Start Investing” and “How to Come Out a Simple Dividend Investment Plan“, I would recommend you to read it first. 1) Open Brokerage AccountThere are 2 types...

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Why Invest in REITs

Real Estate Investment Trusts or simply REITs are listed companies that buy, rent out and manage properties. REITs lease out spaces and collect rentals from their tenants which is then pay out minimum 90% of taxable income as dividend to its shareholders, either quarterly or semi-annually. If you have not heard about REITs before, then let me give you some examples: Westgate, Plaza Singapura, Bugis+ Causeway Point, Northpoint City North Wing, Changi City Point Bugis Junction Tower, Marina Bay Financial Centre, One Raffle Quay CWT Commodity Hub, Pandan Logistics Hub, DHL Supply Chain Advanced Regional Centre Mount Elizabert Hospital,...

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