Leave a Comment:
Hi there. Thanks for the article. I know nothing about investment. I went for an introductory talk on how to grow your wealth by a certain renowned person in sg. He mentioned about investing in some Reits like CMT and blue chips and indexes. I dont think i will be attending the whole course though. Would please advise me on how to get started? And what is the minimum investment and brokerage charges?Reply
You can get started by opening an account that allows you to buy stocks from one of the securities firm. Your assigned broker will be happy to answer your questions.Reply
If any of the REITs or Business Trusts were any good, they would not be listed out to the public but milked as a cash cow by their old owners.
Good example would be PSA; this is a total cash cow for SG and Mapletree. Why list it out and let outsiders share in the profit? Doesnt make sense.
Many many REITs and Business Trusts have been listed as they have been unloaded by their previous owners having become less profitable (from a margin, point of view). Hutchinson Port Trust and even to a certain extent the Mapletree collection of Commercial, Industrial and Logistics trust.
Apologies ahead if I am being too blunt here; but it would help if you put yourself in the shoes of a business owner.Reply
i’m an expert reit investor. i would say this because i invested 90% of my wealth in reit from the very first one called CMT. I loved the idea of a share of the real estate. As a result, I have an amazing ride from $1 at IPO to $4.2 at the peak. all from 2003 to 2007. When the stock collapsed in 07, I added more, and more….but it fell and fell.
I felt it would still go up…one day, so things were ok. Until the day CMT decided to issue rights. one by one, reits started to issue rights, diluting existing shareholders forever. Existing shareholders were screwed big time. They would NEVER be able to recoup! I can’t see CMT returning to $4 for a longggg time. maybe 20-40 years. The so called big feeder developers like capitaland who happily unloaded into reits, now disowned CMT and Capitaretail China, letting them fend for themselves. The then CMT CEO, Mr Pua , think, was a good guy. But he was kicked out (I guess), after all his work.
After the crisis, CMT and CRCT were useless to Capitaland, so they created Capitamalls Asia. I remember they even advertised their IPO on funan center, which belongs to CMT, i wonder why cmt didn’t sue capitaland for using its similar name. I am not touching anything capitaland, based on their behavior during the bad times.
I consider myself a verteran now. I lost more than a million SGD on reits. I’ve made it back by exiting reits and entering into other stocks. I think generally reits won’t make the same mistake of being over levered so soon. But in 5-10 years, maybe they will. They are at this time still great for yield. But anything at 4-6% now is too low for me. if interest rates rise, you’ll see yields and share price fall again.
go for the low levered high yield, but be careful, there are reasons why reits are high yield. if you dont know why, then you haven’t done enough homework, and are asking to be screwed.Reply
So could one tactically benefit from a mix of retail and commercial Singapore REIT’s over the next 6-12 months? Yields as published for the leaders are attractive at 8-9%. BTW, How does one purchase such securities in Singapore-is there a discount broker? Cheers!Reply
You can just buy through any securities firm in Singapore.Reply
I don’t really agree with Sureesh’s recommendations.
For K-reit, refer to the article on K-reit here
For Ascott – it is trading above NAV with a lower yield. I feel that it is the branding that attracts this premium. It is like asking “Would you like to pay COV for your HDB flat purchase ?”
There are better choice and yields on REITs.
Just my 2cents worth. ^0^
I would suggest that you look at K-reit and Ascott reit. The first is an office reit with good exposure to our new business district and the other is a hospitality reit.Reply
Good article. I actually discovered this site through a web search on Singapore REITS, and what interested me in the topic in the first place was an email update from “The Sovereign Investor” newsletter singing the praises of SREITS. So this being the first time I ever knew of them, I wanted to check it out more carefully.
So ultimately, they’re pitching three in particular: Suntec, CDL Hospitality and Mapletree. In fact, if possible, I’d like to share the newsletter with you to let you see their view and maybe you can discuss your view in comparison.
I’ve successfully invested in REITs before here in the States, but never considered internationally. I am hearing and reading good things about Singapore, so this is something I may want to consider in the future.
That said, I wouldn’t know exactly how to invest in these particular Singapore-based REITs; can you provide some feedback? I’m in the States, so I’m presuming that I would need to get in touch directly with the companies investor relations departments? Please advise.
Feel free to respond as you have time, I’ll be interested to know your thoughts, and will be happy to forward the newsletter message if you want to supply an email address.
The s-reits are listed on our local stock exchange. Do you have stock brokers over there that allow you to invest in overseas markets?Reply
I’m interested to know your thoughts on this article, where I learned of the SREITS originally…
Have you any opinion on this?
A number of the REITS are actually trading above their NTA.
I prefer to buy when they are trading below…Reply
I am learning and investing into REITS recently and use sites like these
Hoped this helpsReply
AIMSAMPI Reit recently announced a 7 for 20 offer. I am a current holder of AIMSAMPI but is skeptical about it.. as mentioned in your article… “discounted price fool…”.. ha…
Any views or advice on this? Appreciate it… cheersReply
They have too many interested party transactions (IPT). Don’t really like it. But do note you have to act on the rights (subscribe or sell).Reply
Most of the REITs are set up by developers, the REITs help them to divest their assets to the small investors via the vehicle of REITs. The REITs become their ready buyers. The developers become the REIT managers and making decisions to buy and sell assets for the REITs.
Is there a possibility for the developers to unload their unwanted assets at an unreasonable high price to the REITs and buy the good assets from the REITs at a unreasonable lower price? If yes, who will check the details of the transactions to protect the interest of the small investors in REITs?
Please advise. Thanks.Reply
Yes, it might be possible. But if it’s a related party transaction, shareholders voting might be required.
At the end of the day, we have to invest with our eyes open and see what they do.Reply
“For those existing investors who could raise the capital to subscribe for their rights, they are returning most (if not all or more) of the dividends they had collected back to the REIT. Don’t let the discounted price fool you as you are essentially paying just to maintain your percentage shareholding in the REIT. ”
I strongly agreed with your view on “discounted price fool”.Reply
In 2019, this article looks fricking hilarious. Even without the run up in prices over the course of this year (I’d agree that the current valuations are relatively rich with compressed yields), but people who have been vested in the quality REITs over the past 7-8 years would have earned so much from the distributions that they’d be laughing their way to the bank.Reply