16.8.12

Singapore REITs safer than houses

Gotten an email from my stock broker again.. a very detailed analysis on why 

REITs 

are safer than houses?!

You can have access here: http://www.mediafire.com/?f2egf1j4tec8eh6

The 4 key points they talked about are summarized below:

  1. Earnings and balance sheets resilient; A low interest rate environment and a firming SGD should continue to support yield compression
  2. REITs delivering steady and dependable 13% DPU growth in 2Q
  3. Sector gearing remains comfortable, at 31%, providing flexibility for acquisitions.
  4. Valuations returning to long-term averages; risk perception to pre-crisis levels 

My Two Cents

Although REITs are still showing that they can deliver good returns to the investors; the distribution yield will become lesser if the price of the REITs go up. 

Thus, I believe when you are choosing your REITs, you will still do better in selecting REITs with constant progression in yield and has room for growth.

Going forward, capital appreciation of REITs may not be as robust as before since all the mid-caps are experiencing high volumes -> with risk appetites going up -> less people will turn to REITs for stable yield.

Nevertheless, they are still good for passive investing; especially for ladies who want to get higher returns but not interested (or will lose sleep) upon seeing the fluctations of the stock markets... (Monday and Tuesday is one such good example =p)

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!

1 comment:

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