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The Weekly Nibble: A Focus on Real Estate

Here are some interesting articles on property stocks and real estate investment trusts (REITs) that have appeared on the Motley Fool Singapore’s website this week.

The Best Hotels To Buy

When valuing a property company, using the price-to-earnings (PE) ratio is futile as the earnings of the company could be warped due to revaluation of its properties. Similarly, when looking at hotel stocks, using the PE ratio to value them can be very misleading.

In his article, David Kuo discusses various methods to find value in hotel stocks, including using the enterprise value multiple and the free cash flow yield. You can head to his article here to learn about all the different valuation metrics that are useful in assessing hotel stocks.

Some of the companies discussed in David’s article include Shangri-La Asia Limited (SGX: S07) and Mandarin Oriental International Limited (SGX: M04).

2 Cheap Property Stocks That Have Exposure To The Fast Growing Hong Kong Property Market

Here’s an extract from the article above:

“The fast-growing Hong Kong property market has ballooned in the past few years. Over the six months ended February 2018, Hong Kong home prices rose 6.9%. Colliers International estimates that mass residential property prices are likely to increase by 8% to 10% this year, with smaller units increasing at a faster pace of 15%. This is a tremendous rate of growth for any investment.”

Is there still value to be extracted from the Hong Kong property market or are we a little too late? It looks like there are still undervalued assets as Motley Fool Singapore contributor Jeremy Chia uncovers two Singapore-listed companies with heavy exposure to the Hong Kong property market that are trading below their book values.

However, before investing in them, investors should analyse how a significant drop in property prices in Hong Kong will affect the value of their businesses. Jump into Jeremy’s article here to know more.

The companies that Jeremy discussed include Hongkong Land Holdings Limited (SGX: H78) and Fortune Real Estate Investment Trust (SGX: F25U).

3 REITs That Have Grown Their Distributions Per Unit For Five Straight Years

The Singapore stock market is home to over 40 REITs and stapled trusts. Of those, Jeremy had picked out three that have managed to grow their distributions per unit for five consecutive years.

As of Thursday, the average distribution yield of the Singapore-listed REITs and stapled trusts was around 6.5%. Even though the three REITs that Jeremy had picked out have yields that are below-average, they could still provide attractive yields-on-cost if their track record of increasing their distributions is maintained. Here’s the article.

The REITs discussed by Jeremy include Fortune Real Estate Investment Trust (SGX: F25U), Ascendas Real Estate Investment Trust (SGX: A17U) and Frasers Centrepoint Trust (SGX: J69U).

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Mandarin Oriental International Limited, Hongkong Land Holdings Limited and Frasers Centrepoint Trust. Motley Fool Singapore contributor Sudhan P owns shares in Hongkong Land Holdings Limited.