Martin Lee @ Sg
Sharing is Caring!

Becoming a REIT Investor

One of the better performing category on the Singapore stock market this year has been Real Estate Investment Trusts (REITs) as the hunt for a higher yield has seen many investors buying into them.

But not all REITS have performed the same.

Selecting a good REIT does require doing a bit of homework. DIY investors would find this REIT site pretty useful as it is updated with all the relevant data and information.

Timing is of course another issue and you would want to be careful not to buy into a REIT that is overvalued. As of now, experts are split over how long the REIT rally can last.

And of course there is the long standing debate about whether the interests of the REITs manager are actually aligned with the unit holders and their fee structure. I had wrote about this in my earlier article about whether Singapore REITs were a good investment.

Because of the somewhat common capital raising exercises (through rights issues), it is imperative that an investor who invests into REITs is a person who reads all the circulars that are sent to him. You would not want to miss a rights issue exercise and get your shares diluted.

I would probably go further and comment that anyone who invests into any kind of stocks should do the same.

If not, he or she would be better off investing into a collective investment scheme such as an ETF or unit trust

Leave a Comment:

Notify me of followup comments via e-mail. You can also subscribe without commenting.

7 comments
B says 7 years ago

Hi Martin

You are right. Reits just like any other stock tend to be more risky than ETF or unit trust.

I’m still regretting purchasing my unit trust to be honest. I would have cancel it if not for the insurance I was covered.

B

Reply
    Martin Lee says 7 years ago

    Dear B,

    buying unit trusts through insurance is generally not a very good idea as it increases the costs. And it is also less flexible.

    Reply
Yvette says 7 years ago

Hi Martin

What really is a REIT ? How is it different from shares ?

Reply
    Martin Lee says 7 years ago

    In short, a REIT is a type of shares that invests into property and pays out almost all its rental income as dividend.

    There is a longer moneysense article at this link:
    http://www.martinlee.sg/investing-in-reits-or-business-trust/

    Reply
    Yvette says 7 years ago

    Martin, thanks for pointing me to the very well written MoneySense article. Meanwhile, I’ve signed up for a free talk by SGX on REITS. Hope it is not a sales talk by someone who is conducting an investment course. Nowadays nothing is for free.

    Reply
      Martin Lee says 7 years ago

      Dear Yvette, you should be able to pick up something useful but I think they will also be selling some “advanced” course.

      Reply
      Yvette says 7 years ago

      Hi Martin. You are right. The “FA-TA guy” (aka Chua I-Min) was trying to sell his REIT course for $500. For that kind of money, I could invest it with Phillip Real Estate Fund and/or read the “Value Investing For REITS” book.

      Reply
Add Your Reply

Notify me of followup comments via e-mail. You can also subscribe without commenting.