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SPH REIT’s Share Price Is Close To A 52-Week Low: Is It Cheap Now?

SPH REIT‘s (SGX: SK6U) share price of S$1.02 currently is just 4% higher than a 52-week low of S$0.98. For me, this raises a question: Is SPH REIT a cheap share at the moment? This question is important because if the REIT’s shares are cheap, it might be a good investment opportunity.

For a quick overview, SPH REIT is an owner of three retail malls in Singapore: ParagonClementi Mall, and The Rail Mall. Newspaper publisher Singapore Press Holdings Limited (SGX: T39) is the sponsor, manager, and a large unitholder of the REIT.

There is unfortunately no easy answer to my question above. But, we can still obtain some insight by comparing SPH REIT’s current valuations with the market’s. The two valuation metrics I will focus on are the price-to-book (PB) ratio and distribution yield.

I will be using the average PB ratio and distribution yield for the 43 REITs that are currently listed in Singapore’s stock market (according to data from SGX Stock Facts) as the proxy for the market. The table below shows the valuation comparisons:

Source: SGX Stock Facts

We can see that SPH REIT’s PB ratio and distribution yield are both less attractive than that of the market – in other words, SPH REIT does not look cheap compared to the rest of its peers.

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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.