Was lurking for a long time and recently went for a Reits investment course that teaches you how to value Reits. This was the framework the instructor told us to create and analyse each Reits with respect to its strength and weakness.
Disclaimer : These are just knowledge I have gotten from the course and wish to discuss with the pros in this thread. Not a call to buy or sell. The below data some are taken from other websites which i do not claim to be 100% correct. Please do your own checking and due diligence to confirm the authenticity of these data. the instructor did inform that now was not a good time to buy Reits. Thus this example below is just for illustration purpose and to discuss on points he may have missed out.
An example is Starhill Global which I really wish to do this analysis because as Singaporeans we love buying "undervalued stuff"
Type : Mixture of Retail and Office(Retail (86.6%) + Office (13.4%) by Revenue)
Current Price : 0.81
NAV : 0.92 – Retrieved from reitdata.com
Yield : 6.224% – Retrieved from reitdata.com
(Must be more than 6% than I will consider)
Gearing 29.4% – Retrieved from reitdata.com
(Must be less than 35% than I will consider)
Price to NAV ratio: 0.88 -undervalued in terms of NAV
WALE (Weighted average lease expiry) : 45.9% of master tenants expiring on 2016 which may not be a good thing. (
http://starhillglobalreit.listedcompany.com/misc/ar/ar2013/ar2013.pdf) - page 33 however this is based on 31.12.2013 report which may be outdated
WADM (Weighted average debt maturity) Debt maturing in 2015 and 2016 based on the 2013 annual report - based on the instructor this is not good. (
http://starhillglobalreit.listedcompany.com/misc/ar/ar2013/ar2013.pdf) - page 59 however this is based on 31.12.2013 report which may be outdated
Forex Risk : Yes (japan, China, Australia, Malaysia, Singapore)
Country Risk : Yes (japan, China, Australia, Malaysia, Singapore)