Save money by having restaurant quality ramen at home!

This blog post is dedicated to a kindred spirit, SMOL.

I love eating Japanese style ramen. A bowl with hot soup is to die for.

However, it is not cheap to have a bowl of Japanese style ramen in Singapore and I am sure a huge portion of what we pay goes to rents and salaries. This is especially obvious when I found that I could have 4 bowls of restaurant quality ramen for only $3.85. Yes, not 1 but 4 bowls!



They come in packs of 4. There are 2 flavours. I prefer this one.

Recently, I bought more because there was a special offer in NTUC Fairprice. $3.35 per pack of 4.

Here is AK in action:



I tried this flavour for dinner recently.

Cook for 4 minutes, stirring often. Then, turn off the fire and add seasoning. Mix well.

Restaurant quality ramen at less than $1 a bowl. Really, really good!

If you are thinking of going out for a bowl of good quality ramen at Ajisen Ramen, for example, think again.

Think of how much money you could save by cooking at home. The taste of this instant ramen is really authentic and the money you save is very real too.

If you like ramen but have always hated instant noodles, this will change your mind. I am sure.

Oishi and in more ways than one too!

Related posts:
1. Korean noodles for lunch.
2. AK brand cup ramen!

Sabana REIT: Should I sell at a loss?

This blog post is in reply to a reader's comment: here.

Hi Kim,

You have asked one of the most difficult questions ever. :)

I wouldn't buy at the current price because I believe that Sabana REIT should offer a bigger premium in distribution yield compared to A-REIT, for example, because of its spotty track record. So, chanting to myself a familiar mantra which is "buy at a price I would not sell at and sell at a price I would not buy at", I should sell.

Of course, if we have to make a loss in selling an investment, it becomes a bit tougher. I never like selling at a loss. Who does?

However, if selling makes sense, we should sell even if it is at a loss and it makes sense if:

1. The business fundamentals have changed for the worse and the reward for staying invested has been drastically reduced or is, in some instances, non-existent.

OR

2. We have found a better investment with stronger fundamentals and better returns.

Of course, if we believe that Sabana REIT's distributable income of 1.88c or so per unit per quarter sufficiently compensates us for being invested at the current price, then, stay invested.

Personally, I would be more comfortable with at least an 8% yield which is what I am accustomed to getting from Sabana REIT. So, a unit price of 94c, all else remaining equal, would be more enticing.

If I were holding on to a loss making position in the REIT but if it is not a big position, I will probably continue to hold on. If it is a big position, I will sleep better at night if I sell half of my investment and take the loss as a fee paid to Mr. Market. If it is a very big position, I might sell 80% of my position. I will most probably not sell everything.

Not selling everything also gives me an incentive to keep monitoring the REIT as I still like the high tech industrial buildings which form about half of the REIT's portfolio. After all, it is not as if Sabana REIT is going to do a Titanic in the next 12 months.

All investments are good at the right price and there could be a chance to buy into the REIT again with a good margin of safety.

That is an imperfect approach that gives the imperfect me peace of mind. :)

Related post:
Sabana REIT: 1Q 2014.

Yummy yum yum (60c) breakfast.

Happy Good Friday!

This is my yummy western style breakfast! Looks good! Tastes good!

Kids, don't do this at home although I am sure you would love it.

Cost? Er... 60c, maybe.

Related posts:
1. Gourmet sandwich.
2. Have a break!
3. What's for lunch?

Croesus Retail Trust: AK makes a suggestion.

This blog post is in reply to a reader's question on Croesus Retail Trust: here.

Hi Capricon,

Not that I know of, no. Of course, I could have missed it. -.-"

I know the management is caught in a situation where they really want to seize acquisition opportunities because commercial property prices are rising fast in big cities in Japan.

However, the biggest advantage of being a business trust has been blocked by the management's own promise not to gear beyond 60%. After their recent two acquisitions, they don't have much left in terms of debt headroom.

I do not see how a higher unit price will help them to borrow more money since gearing is calculated based on the value of the properties in the Trust and not its market cap.

If they want to do another acquisition without having gearing cross beyond 60%, the way is to do equity fund raising either through rights or placement.

Actually, Jeremy Yong could consider something else. The Trust could issue perpetual bonds because they are treated as part of the equity structure. So, gearing would actually drop and the Trust would have the money to do more acquisitions. As long as the NPI yield is higher than the coupons to be paid on the bonds, unit holders will benefit. However, if the Trust does this, I hope the bonds are in JPY and not in S$.

Do you have Jeremy Yong's contact details? If you do, send him an email and tell him what AK suggested. Of course, I do not know if it is practicable or not. Just a crazy idea, perhaps. ;p

Related posts:
1. Croesus Retail Trust: Luz Omori and Liz Wave I.
2. Perpetual bonds: Good or bad?

Sabana REIT: 1Q 2014 DPU 1.88c.

Although I expected a decline in DPU from Sabana REIT, the decline to 1.88c is rather drastic. Based on a unit price of $1.08, this gives us an annualised distribution yield of only 7.05%.

Remember I made an assumption in an earlier blog post on Sabana REIT regarding how Mr. Market might demand a premium in distribution yield from the REIT compared to A-REIT? At that time, I said that Mr. Market might send the unit price down to $1.03 if it should demand an 8.5% yield. In fact, it touched a low of $1.005.

With distribution yield now at 7.05%, to get to an 8% yield, unit price might fall to 94c. Well, a drastic fall in DPU might just be accompanied by a drastic fall in unit price. I am not saying that it will happen but I won't be surprised if it should happen.

If we look at the numbers, it is really the almost 400% increase in property expenses that has resulted in a huge reduction in DPU. Of course, there is also the issuance of new units in payment to the management of the REIT as well as a higher vacancy rate.

As investors, we want to know if the increase in property expenses is temporary or permanent. So, we have to look at the details. These expenses are:

(i) Property and lease management fees incurred for the Acquisition Property;

(ii) Higher property tax, maintenance, utilities and applicable land rent expense, in line with the increase of directly managed multi-tenanted properties from one in 1Q 2013 to six in 1Q 2014;

(iii) Higher property management fees in line with the higher revenue from 151 Lorong Chuan; and

(iv) Lease management fees being charged to the 15 properties acquired during IPO, following the expiry of the three-year waiver period in 4Q 2013

 

Source: 1st Quarter Financial Statement.

From what I can see, all four expense items are here to stay. So, even if the REIT should achieve 100% occupancy once again, it will be difficult for it to achieve a DPU that is even close to that of last quarter's.

The much lower DPU this quarter and a weaker outlook for industrial properties, together with my belief that the management's interests are not strongly aligned with minority unit holders', have pushed me to look into possibly making another partial divestment.

The good news? We now know what is probably a realistically sustainable DPU for Sabana REIT, everything else remaining equal. Things could worsen, of course, if the one Master Lease expiring end of 2014 is not renewed but it would be unlikely for things to worsen considerably. Having baseline information like this will help us in deciding when it could be a good time to buy into the REIT again with a greater measure of confidence.

See presentation slides: here.

Related posts:
1. 4Q 2013 results.
2. Reduced Sabana REIT.
3. Buy but remember the Sukuk.

Commonwealth Towers: Average price $1,600 - $1,700 psf?

After so many rounds of cooling measures, the heat is still on if the response to Commonwealth Towers is anything to go by. Apparently, more than 1,500 people turned up at the preview.

This is going to be one densely populated piece of land. The land area is a little more than 130,000 square feet which is decent enough but what is the plot ratio? 5.38!

Imagine that this was where Queenstown Test Centre was located. People went there to take their driving theory tests years ago. I remember. I took my test there too.

There will be 845 units with 11 units per floor in two towers. I wonder how many lifts they have per tower? My guess is 3 lifts per tower. This means 141 households share one lift, more or less. I think there might be problems if the experience shared by people who stay in the condominium across the road (i.e. Queens) is anything to go by.

Well, maybe Commonwealth Towers will be generous and will have 4 lifts per tower, the ratio improves to 106 households per lift. Still, people who stay in HDB 5 room flats in point blocks should smile since, in their case, 96 households share two lifts.

The location is good but I just don't know about living in such a densely packed project. Oh, if you are interested, you want to consider buying units facing away from the MRT tracks. Commonwealth MRT station is an above ground station.

Oh, what about the price?

It is estimated that the average price could be in the range of $1,600 to $1,700 psf! So, for a 441 sq ft one bedroom unit, I would not be surprised if the price is even $1,800 psf which means a price tag of $793,800. Almost $800K and this could be the price for the low floor units!

Mind boggling!

I don't know about you but I am perspiring from the heat. More cooling measures, please.

Related posts:
1. To rent or to buy: Rule of 15.
2. Make your first million in real estate.
3. Buying a private property?
4. Slaving to stay in a condominium.
5. Never lose money in real estate?

CapitaMalls Asia: Being offered $2.22 a share.

I have been a CapitaMalls Asia shareholder since middle of 2011 and when I found out that the parent is offering to delist the company, I had mixed feelings.

The positive is that at $2.22 per share, the offer price is fair. The NAV/share is $1.84. So, this offer is a 20% premium to book value. NAV grew 10% year on year. So, being paid $2.22 a share, it is like getting paid in advance for growth that is likely to happen in the next couple of years.

The negative is that I will lose the chance to buy more of a stock which I believe was going through a period of price weakness, given the concerns about China. So, I was looking forward to accumulating with a greater margin of safety (i.e. buying at a bigger discount to NAV). Well, not going to happen now.

With an IPO price of $2.12 a share in late 2009, privatising CapitaMalls Asia with an offer price of $2.22 a share makes sense. It is like borrowing money from the public and paying an interest of only 1.05% per annum over a 4 and a half year period.

This is, perhaps, a good time to remember what Warren Buffett once said.

The idea that an IPO, offered with significant commissions, with all kinds of publicity, with the seller electing the time to sell, is going to be the single best investment that I can make in the world among thousands of choices is mathematically impossible.

Buffett is the reason why I have not bought into any initial public offerings in many years.

Anyway, I will probably channel the funds from this divestment into a war chest and wait for Mr. Market to feel depressed again. There is no hurry to buy anything.

Read press release: here.

Related post:
A strategy to grow wealth and augment income.