Analysing REITS

[thor666]

Junky analyst trying to talk down the prices only lah .

All the S-REITs are still solid as a ROCK !
The average return of 5% to 8.5% is so much better than the
propaganda Singapore Saving Bond with miserable 1 ~ 2.2% return.

Is the S-REITs so bad now?

OCBC warns S-REITs may reap 'almost no total return' until end 2016

SINGAPORE (22 July): OCBC Research warned investors on Tuesday about the performance of S-REITS, urging them to reallocate their capital as they may achieve “almost no total return” from now until the end of next year. More worryingly, investors may be hit by a rapid initial capital loss as prices fall, before subsequently recovering to par on dividend gains.

The broker expects rising interest rates in the US and declining distributions growth to make the risk-reward of the REIT sector "unfavourable”. The prospect of rate hikes will prompt investors to shift from seeking yields to capital preservation.

With this in mind, it recommends that investors practise bottom-up stock picking in the sector and "active capital reallocation into high-end developers and real estate players in strong growth segments" such as high-end homes, logistics facilities and data centres. It likes developers of high-end properties such as Wing Tai, Wheelock and OUE instead. It also likes Global Logistics Properties, which builds modern logistics facilities in China and Brazil where supply is not enough to meet demand from rising e-commerce.
...
http://www.theedgemarkets.com/sg/article...l-end-2016

I am in between on this. Hold both ascott and mlt and seeing their gearing go up, revenue per unit/sqft go down. Not likely 0 return for particular reit but if looking at s-reit sector as a whole, there might be that possibility. Some of the reits are particularly weak... Take caution.

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