Stock Review: If I were to pick a Retail Trust

I had not done a retail REIT comparison before, so I decided to do one. Here are the REITs that I selected.

1. CapitaMall Trust (CMT)
2. Capitaland Retail China Trust (CRCT)
3. Mapletree Commercial Trust (MCT)
4. Starhill Global REIT (Starhill)
5. Suntec REIT (Suntec)
6. Fraser Centrepoint Trust (FCT)
7. SPH REIT (SPHR)

I wanted to compare the Singapore properties mainly, so I went through the financial statements and presentations to compile a table of key indicators I am interested in. These are, in order of priority,

1. Net income/lettable psf - how much income after deducting expenses per square foot of lettable space, the higher the better because it means I can earn more for each square foot. I also deducted the adjustments on fair value of properties (unrealised paper gains on property value) which will unnecessarily boost the earnings because it doesn't translate to cash income.
2. Overall profit margin - how much income per $1 collected, the higher the better because it means expenses are lower.
3. Loan interest rate - the lower the better, because it shows how the banks and debtors are perceiving the riskiness of the business.
4. Occupancy - the higher the better, because it shows that demand exceeds or matches supply. This helps to ensure that rentals can be held steady or increased.
5. Dividend/Earning per share (EPS) - the lower the better because it shows that the properties are sitting on large unrealised paper gains on property value.
6. Debt % - the lower the better
7. Yield - the higher the better, but this needs to be compared with the other similar REITs because there is a premium to pay for steady and resilient businesses.
8. Price to book - how much discount the price is to market value of the properties, the lower the better because it means I get to buy the properties cheaper, but similar to yield, there is usually a premium to pay for the steady and resilient businesses. 1 means fairly valued.

Comparison chart based on respective financial reports. May have data transposition errors, although I double checked most figures.

Overall, I like CMT the best mainly because of its high income/lettable psf, profit margin, 99.2% occupancy and dividend to EPS  I was half thinking why I didn't do this review earlier so that I can buy the stock at cheaper prices when REITs were having their great singapore sale.

My next favourite is SPH REIT, which I already own and this comparison re-affirms my decision. It's 100% occupancy (year after year) is what I like the best. Low debt is just a side kick. The rest doesn't really matter.

I will keep a watch on CMT and seek to add if prices recede closer to book value of $1.92.

My Awesome HUAT Guesses

I received an advertising mailer selling a recommended list of REITs in Singapore. When I looked at the teaser, my riddle-solving mind became very excited so I thought... it can't be that hard to guess right?

Just for fun, my awesome HUAT guesses to the riddles:

1. Ascott REIT "only REIT of its kind in Singapore... 6+%" cos Keppel DC REIT doesn't meet the 6+%.
2. Capitaland Commercial Trust "owns a handful of the sheer most valuable prime commercial real estate in the country"
3. Capitaland Retail China Trust "10 income-producing properties (in some of China’s very best locations)"
4. Capitaland Mall Trust "landlord with some 3,000 tenants"
5. Ascendas REIT "manufacturing and warehouse sites ... overseas assets... loyal clients ... 6+%" would have guessed AIMS AMP if it didn't say 6+%.
6. Mapletree Commercial Trust "more than 1 million square feet of the best commercial real estate in Singapore"
7. Starhill Global REIT "Malaysia, this REIT boasts a portfolio of dozens of prime properties... excellent lease structure"
8. SPH REIT "suburban mall play with little debt"

Any resemblance to the actual report is merely coincidental. 

Any wrong guess is also unintentional.