My Personal Analysis of Accordia Golf Trust

I have recently stumbled upon a Business Trust with an interesting business model which is Accordia Golf Trust. This is the first Business Trust comprising of investments in golf course assets in Japan. Accordia Golf Trust is 49% held by Accordia Golf Co., Ltd. (the “Sponsor”) and 51% held by Daiwa Real Estate Asset Management Co., Ltd, a wholly-owned subsidiary of Daiwa Securities Group Inc.

I am not a golf player and know nothing about golf. If you are a novice to golf like me, you probably will wonder where do Accordia Golf Trust derive its revenue from?

Based on what I found from the prospectus, the operating revenue for Accordia Golf Trust comes from three areas which are golf courses, restaurants and memberships. The sponsor, Accordia Golf Co. Ltd. supports the operation of the golf courses. The business model is very unlike other Business Trusts and REITs whereby they derive their revenue based on rental income.

In Accordia Golf Trust, income comes from fees paid by visitors who play golf on its golf courses and thus the number of golf players is a determining factor of its golf revenue. This explains why you can find the Accordia Golf Trust publishing monthly reports of its total number of players for each month.

The other income will be the golf membership. Because the golf courses are based in Japan, unless you are a local, it is unlikely that you will sign up for a membership.

Accordia Golf Trust also derive its income from restaurants that are operated within the golf courses. Based on what I found, an average game of golf takes at least four hours. The players are likely to dine in restaurants located within the golf courses.


Based on the fact sheet as of 31st December 2019, Accordia Golf operates 88 golf courses, all in Japan with 70% in key areas such as Tokyo, Osaka and Nagoya.

Number of Players

Instead of occupancy, we should be looking at the number of players at Accordia Golf courses because the number of players determine its revenue. The number of players in FY19/20 seem to increase as compared to FY18/19 and FY17/18.

If you think the number of players will be impacted by COVID-19, think twice. In February 2020, the number of players was 413,800 and utilisation rate was 74.5%. In March 2020, the number of players was 469,950 and utilisation rate was 76.2%.

Financial Summary

Below is Accordia Golf Trust’s 9 month’s financial results. Operating profit for 9M FY19/20 was JPY 9,045 million, which was higher than 9M FY18/19, mainly due to better performance and increase in number of visitors to the golf courses.

1st Apr 2019
31 Dec 2019

(JPY million)
1st Apr 2018
31 Dec 2018

(JPY million)
Operating Income41,49941,0771.0%
Operating Expenses32,45433,243(2.4)%
Operating Profit9,0457,83415.5%
Profit After Tax6,3455,9876.0%
Distributable Income4,2423,19432.8%
Distribution Per Unit (“DPU”) (JPY)3.862.9132.6%
Distribution Per Unit (“DPU”) (S$ cents)4.783.5634.3%

Distribution History

The distribution per unit has fallen over the years especially between FY16/17 to FY17/18. In the annual report, it was mentioned that adverse weather conditions across Japan such as rain and snow have affected its revenue.

Dividends Paid (SGD cents)3.773.856.046.63


As of 31st December 2019, the loan-to-value ratio (LTV) stood at 30.5%. A higher ratio means that the manager (borrower) owes a higher percentage in comparison to the asset’s value. In this case, I think 30.5% is within comfortable limits.


Mr Yoshihiko Machida is the current Chief Executive Officer and an Executive Director of the Trustee-Manager. He has extensive experience in general management and is very familiar with the golf course management business, having worked within the Accordia group for nearly 10 years.

The Sponsor Accordia Golf Co. Ltd is the leading golf course operator in Japan. Recently, there are news that the sponsor is offering 63.17 billion yen (S$783 million) to buy up the assets, including the holding company’s debts. I am not sure what it mean for investors.

Current Valuation

Based on the current closing price of S$0.56 and historical dividend payout of 3.77 Singapore cents, this translates to a current dividend yield of 6.73%.


Accordia Golf Trust is not my kind of dividend yielding stock that I will hold for the long term even though the dividend yield can be attractive. It amazes me on how the number of golf players are not affected by the current COVID-19 situation but I expect the golf revenue to be lumpy as unexpected bad weather such as Typhoon Hagibis can cause the golf courses to be closed.

If good weather is on Accordia Golf Trust’s side, the Tokyo Olympics will be a good catalyst for Accordia Golf Trust to further increase its revenue and distribution per unit. Nihon Golf-jo Keieisha Kyokai (Japan Golf Course Management Association) indicated that the number of senior golfers, above 70 years old, has increased from 16,800 in 2017 to 18,000 in 2018. The aging population in Japan is also another thing investors can bet on.

My Personal Analysis of First REIT

I believe many of you have heard of First REIT. Recently, one of my readers asked me about First REIT. I have not looked into the details of First REIT but I do know that it is a healthcare REIT. Investing into the healthcare industry is considered low risk by many because healthcare services are something that everyone needs no matter the economy is good or bad. Now, let us look into First REIT and whether it is worth investing.

First REIT is Singapore’s first healthcare real estate investment trust that was listed on Singapore Exchange Securities Trading Limited (“SGX”) on 11th December 2006.


First REIT has a total of 20 assets in three countries which are Indonesia, Singapore and South Korea. They have 16 assets in Indonesia alone. I was quite amazed by the number of assets they have in Indonesia. First REIT have 3 assets in Singapore and 1 asset in South Korea.

Indonesia (16 assets)

  • Siloam Hospitals Buton & Lippo Plaza Buton
  • Siloam Hospitals Kupang & Lippo Plaza Kupang
  • Siloam Hospitals Manado & Hotel Aryaduta Manado
  • Siloam Hospitals Yogyakarta
  • Siloam Hospitals Labuan Bajo
  • Siloam Sriwijaya
  • Siloam Hospitals Purwakarta
  • Siloam Hospitals Bali
  • Siloam Hospitals TB Simatupang
  • Siloam Hospitals Makassar
  • Mochtar Riady Comprehensive Cancer Centre
  • Siloam Hospitals Lippo Cikarang
  • Siloam Hospitals Lippo Village
  • Siloam Hospitals Kebon Jeruk
  • Siloam Hospitals Surabaya
  • Imperial Aryaduta Hotel & Country Club

Singapore (3 assets)

  • Pacific Healthcare Nursing Home @ Bukit Merah
  • Pacific Healthcare Nursing Home II @ Bukit Panjang
  • The Lentor Residence

South Korea (1 asset)

  • Sarang Hospital


Occupancy stood at 100% with no leases expiring in 2020. There are only 5 assets expiring in 2021. As we can see below, most of the leases are long leases which is a good thing if you enjoy stability but of course, long leases means less growth since you cannot step up the rent until the lease expires.

Financial Summary

First REIT had released their 4Q2019 financial results on 29th January 2020. Gross revenue declined by 1.6% and Net Property Income (“NPI”) declined by 0.8%. However, First REIT has maintained their Distribution Per Unit (“DPU”) payout of 2.15 cents.

Gross Revenue28,86029,321(1.6)%
Net Property Income28,30428,530(0.8)%
Distributable Income17,16917,0140.9%
Distribution Per Unit (“DPU”) (S$ cents)2.152.15

Let us look at the full year 2019 versus 2018 financial results. Gross revenue and Net Property Income (“NPI”) declined by 0.8% and 1.3% respectively. There is no growth in the Annualized Distribution Per Unit which remains flat at 8.60 cents.

Gross Revenue115,297116,198(0.8)%
Net Property Income112,894114,391(1.3)%
Distributable Income68,46367,6811.2%
Annualized Distribution Per Unit (“DPU”) (S$ cents)8.608.60

Distribution History

If you are looking at growth in DPU, it is slightly disappointing to see the DPU flat at 2.15 cents since 2018 but on the positive note, First REIT has been consistently paying out and maintaining their DPU. You get 8.60 cents per financial year.


The gearing ratio as of 31st December 2019 stood at 34.5%. The weighted average debt maturity is at 2.01 years. As you can see below, they have no refinancing requirements until 2021 which is a good thing.


Bowsprit Capital Corporation Limited is the manager of First REIT. Mr Tan Kok Mian Victor is the Chief Executive Officer since 2017. Mr Victor Tan was formerly the chief financial officer of Bowsprit, and joined the company in 2008. As the chief financial officer, he oversees the financial operations and managing the financial risks of the trust. I will say First REIT is in good hands since Mr Tan has been with First REIT since 2008.

The troubling part of First REIT is actually with its sponsor. Originally, First REIT have only a single sponsor, Lippo Karawaci. In 2018, Lippo Karawaci ran into debt problems and thus sold 100% stake in Bowsprit Capital to OUE Limited (“OUE”) and OUE Lippo Healthcare (“OUELH”) and 10.63% of the total unitholdings of First REIT to OUE Lippo Healthcare (“OUELH”). In January 2020, Lippo Karawaci raised $325m from successful bond issuance, which will be used to pay off most of the company’s debts due in 2022.

The above explains why First REIT have two sponsors. I am not sure if it is a blessing in disguise, but First REIT benefited from the two sponsor’s healthy pipelines:

  • Right-of-First-Refusal (ROFR) to Lippo Karawaci’s properties in Indonesia.
  • Right-of-First-Refusal (ROFR) from OUE Lippo Healthcare and opportunities to tap on OUE Lippo Healthcare’s growing healthcare network.

Current Valuation

I am using 6 months chart so that you can see the price crash due to COVID-19.

Based on the current share price of S$0.74 and historical DPU payout of 8.60 cents, this translate to a super attractive dividend yield of 11.62%.

However, the COVID-19 situation has caused the temporary closure of

  • Lippo Plaza Kupang (“LPK”) (which is part of the Kupang property comprising Siloam
    Hospitals Kupang & Lippo Plaza Kupang); and
  • Lippo Plaza Buton (“LPB”) (which is part of the Buton property comprising Siloam
    Hospitals Buton & Lippo Plaza Buton)

From the manager

The temporary closures affect only retail assets which comprise a small proportion of assets within First REIT’s portfolio, which is predominantly healthcare and/or healthcare related. As the situation remains uncertain, it is currently difficult for the Manager to ascertain the full financial impact of the outbreak on the financial performance of First REIT. Nevertheless, First REIT remains in compliance of its debt financial covenants and has adequate financial reserves to fulfil its obligations in the foreseeable future. The Manager will continue to monitor the situation closely across Indonesia, Singapore and South Korea, and will provide updates on any material developments as soon as practicable.


The current COVID-19 situation seems like a good opportunity to buy into First REIT as this gives you an attractive dividend yield of 11.62%. Like what the manager said, the assets are mainly predominantly in healthcare and/or healthcare related but it is difficult to ascertain the full financial impact of the COVID-19 outbreak on the financial performance of First REIT.

Investors should continue to monitor First REIT sponsor Lippo Karawaci’s debt profile even though $325m was raised to pay off due debts. We have seen how the sponsor’s escalating debt caused First REIT’s share price to fall in 2018.

Taking note of the current attractive dividend yield but unknown financial impact to First REIT, it is good to use the strategy of buying into First REIT in tranches until there is more clarity on the COVID-19 impact to healthcare REITs.

Do not forget if the sponsor gets hit by COVID-19, so will the REIT itself!

Should You Buy Into Straits Times Index During A Crisis?

At volatile times like this whereby the world wide stock market crashes multiple times within a month, it just confuses investors like me on which company to buy into given that we have limited cash in our war chest to deploy. Every stock or company that is listed looks attractive now.

During the Lehman Brothers financial crisis in the year 2008, I have bought STI ETF that tracks the Straits Times Index (STI) at 2,500 level. At that period of time, the Straits Times Index fell as low as 1,594 in the year 2009. When the economy starts recovering, I sold off STI ETF when the Straits Times Index (STI) was at 2,600 for fear that it will plunge again. I was an inexperienced investor at that point in time. The Straits Times Index (STI) recovered to reach above 3,500 level.

We all know that the stock market has crashed. At the current COVID-19 situation, the Straits Times Index closed at 2,410.74 on Friday, 20th March 2020.

Should I buy into the Straits Times Index again?

Straits Times Index (STI) Constituent

The Straits Times Index (STI) comprises of the largest 30 companies in terms of market capitalisation. Below are the list of companies and their weightage in the Straits Times Index (STI).

Straits Times Index (STI) ConstituentWeightage (%)
DBS Group Holdings Ltd14.8%
OCBC Bank11.1%
UOB Bank10.0%
Jardine Matheson6.4%
Keppel Corporation4.0%
Singapore Exchange Limited3.9%
Capitaland Limited3.7%
Ascendas REIT3.1%
Jardine Strategic2.8%
HongKong Land2.6%
Wilmar International2.5%
Capitaland Commercial Trust2.3%
Mapletree Commercial Trust2.2%
Capitaland Trust2.0%
Singapore Tech Engineering2.0%
Venture Corporation1.7%
Thai Beverage1.7%
UOL Group Limited1.7%
Mapletree Logistics Trust1.7%
Genting Singapore1.5%
Singapore Airlines1.5%
City Developments1.3%
Singapore Press Holdings1.2%
Sembcorp Industries0.9%
Jardine Cycle and Carriage0.9%
Dairy Farm International0.8%


One of the factors that most people buy into the index is because they did not know which company to buy into. It is good for novice investors who do not know how to analyze the financials of a company. The second factor why the STI ETF is a good stock is because it pay out consistent dividends but it was deemed unattractive because of the low dividend yield when the stock market as at all time high above 3,000 levels.

The STI ETF has been consistently paying out dividends over the past 5 years.

Dividend Paid (cents)1211.310.19.39.7

Now the stock market has crashed, let us take a look at the current dividend yield.

Based on FY19 dividend payout of 12 cents and STI ETF current price of S$2.43, this gives us a current dividend yield of 4.94%. Of course we must be cautious that dividends may be cut this year and thus the dividend yield may be reduced. However, when the market recovers in the long run, the dividend payout will recover.


If you do not know which stock to buy now and wants to take opportunity of the current crisis where the stock market is cheap, perhaps you can check out STI ETF.