Basic Profile & Key Statistics
Performance Review
Lease Profile
- Occupancy is high at 99.7%
- WALE is long at 4.9 years
- Highest lease expiry within 5 years is high at 36% which falls in FY2024 and beyond, without breakdown
- Weighted average land lease expiry is long at 89.48 years
Debt Profile
- Gearing ratio is moderate at 35.5%
- Cost of debt is low at 0.88%
- All debts are fixed debts.
- All debts are unsecured debts
- WADE is slightly short at 2.7 years
- Highest debt maturity within 5 years is high at 81.7% which falls in FY2024
- Interest coverage ratio is high at 4.5 times
Diversification Profile
- Top geographical contribution is high at 65.9%
- Top property contribution is high at 65.9%
- Top tenant contribution is high at 34.1%
- Top 10 tenants contribution is high at 53.8%
Key Financial Metrics
- Property yield is low at 3.6%
- Management fees over distribution is moderate at 13.9% in which unitholders receive S$ 7.19 for every dollar paid
- Distribution on capital is slightly low at 3%
- Distribution margin is high at 63.6%
Trends
- Flat - NAV per Unit
- Downtrend - DPU, Interest Coverage Ratio, Property Yield, Distribution on Capital, Distribution Margin
DPU at 4Q 2019 is annualized to 6 months to have an apple to apple comparison.
The interest coverage ratio for 4Q 2019 and 1Q 2020 are estimated to reflect a more closer figure in accordance with the Property Funds Appendix of the Code on Collective Investment Schemes.
Relative Valuation
- Dividend Yield - Past 4 quarters DPU @ 4.1 cents / average yield @ 6.17% = S$ 0.665
- Price/NAV - NAV @ S$ 0.845 x average P/NAV @ 0.89 = S$ 0.75
Author's Opinion
| Favorable | Less Favorable |
|---|---|
| Diversified Sector | Concentrated Debt Maturity |
| High Occupancy | Top Geographical Contribution |
| Long WALE | Top Property Contribution |
| Long Weighted Average Land Lease Expiry | Top Top Tenant & Top 10 Tenants Contributions |
| Low Cost of Debt | Low Property Yield |
| 100% Unsecured Debt | DPU Downtrend |
| High Interest Coverage Ratio | Interest Coverage Ratio Downtrend |
| High Distribution Margin | Property Yield Downtrend |
| Distribution on Capital Downtrend | |
| Distribution Margin Downtrend |
It is unfortunate that LREIT performance is impacted by COVID 19 after 6 months of listing, thus the downtrend of metrics. However, performance and fundamentals have seen improvement in 1H FY2021. Moving forward, the phase 3 opening and vaccination are expected to have a positive impact on LREIT performance.
For more information, you could refer to:
SREITs Dashboard - Detailed information on individual Singapore REIT
SREITs Data - Overview of Singapore REIT
REIT Analysis - List of previous REIT analysis posts
REIT-TIREMENT Patreon - Support this blog as a Patron and get SREITs Dashboard PDF
REIT Investing Community - Facebook Group where members share and discuss REIT topic
*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.
No comments:
Post a Comment