MENU

2 Things That Investors Should Know About Viva Industrial Trust Now

Viva Industrial Trust (SGX: T8B), or VIT, is a real estate investment trust (REIT) that has a portfolio of real estate that are predominantly used for business parks and other industrial purposes. Currently, VIT’s portfolio comprises nine properties located in Singapore.

There are two things about the REIT that investors may want to know about right now – its latest financial performance and valuation.

Financial performance

Here’s a table showing important items from VIT’s financial performance for the third quarters of 2017.

Source: VIT FY2017 Q3 Result Presentation

Overall, we see that all metrics performed better than the same period last year.

The positive performance was driven mainly by 6 Chin Bee Avenue and Viva Business Park. In addition, overall occupancy rate was higher at 90.9%, up from 88.6% last year, due to the completion of asset enhancement initiative at Viva Business Park.

Valuation

There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows VIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 39 REITs that are in Singapore’s stock market.

Source: SGX Stock Facts and Google Finance; data as of 30 October 2017

We can see that VIT is trading at a discount to market average based on its high distribution yield. Yet, the price to book is at a 21% premium to the market average.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.