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QuestionsCategory: Portfolio ManagementWhat REITS are Fifthperson Investing right now in Singapore?
William Tan asked 2 years ago

Hi Victor and team,
I finally got my Tiger Broker account up, which was surprisingly a lot harder than I gave it credit for, from Malaysia. 
I recently watched the team doing an analysis on the Singapore REIT market being a hopeful entry point even though it likely recovered back to pre-covid prices by now. However I wish to know top Singapore REITs fifthperson is invested in personally, to give ideas for my own portfolio diversification as I am tad too heavily invested in Malaysia alone.

5 Answers
Victor Chng answered 2 years ago

Hi William,

We are not license to give any recommendation and do note that the method of investment quadrant can;t analyse REITs as it required a different sets of analysis and ratios.

My suggestion why don;t you share some of the REITs that you are looking at and the analysis you have done. We can give you our opinion from there.

William Tan answered 2 years ago

I guess that is true, it sounds like more a subject you all might cover under dividend machine which I am not sure when the intake is.
I been studying capitaland’S C38U Mall Trust and A17U, though I given on up C38U.
I had hoped to buy on a weakness but the price has already risen back to 2.25 which is almost the median pre-covid, following a large purchase by State Street Global Advisors. Its PER shooting about 40x despite a 40% drop in reported shopper traffic. >.< might as well monitor for a possible shortfall or better news on vaccine rollout.
Ascendas shows a better choice, with a more global portfolio of properties though revenues likely had a shortfall with dividend dropping sharply in 2020 but with a focus on more commercial buildings it might recover faster given a vaccine rollout. It also trading closer to a 5 year median share price. So the price feels more fair to me….
D/E ratio feels hard to judge because REITS in general tend to have leverages and I am not sure how meaningful would P/B ratio be. I don’t see any issue on the management side though boards tenure look relatively new.

Jieren Zheng replied 2 years ago

For debt ratios, you can start by looking at Debt-to-Asset Ratio as it is more relevant for REITs.

You can use Price-to-Book ratio as it is an asset heavy company.

Hope it helps.

Victor Chng replied 2 years ago

Thank you JR

Jieren Zheng replied 2 years ago


Victor Chng answered 2 years ago

Hi William,
It is as what Jieren had mentioned, you can use debt to asset for REITs.


For valuation, you can use price to book and dividend yield. You have to go to the past crisis point (Peak and Trough) and find out what is the dividend yield at that point of time. You want to purchase close to historical high yield. Since Capitaland and Ascendas dividend may be affected due to Covid-19 situation, you should consider using 2019 dividend instead of 2020 dividend when looking at the yield. This give you the assumption when the situation get better, what you can expect.

Victor Chng replied 2 years ago

On the side note, both REITs mentioned by you are good REITs in Singapore. Good Job

Ajit Karande answered 2 years ago

Hello friends,
Any idea why Ascendas A17U is dropping?Thanks

Victor Chng answered 2 years ago

Hi Ajit,
It is due to right issuance. 

Ajit Karande replied 2 years ago

Thanks Victor