13-03-2013, 10:48 AM (This post was last modified: 13-03-2013, 10:50 AM by Greenrookie.)
Oh that is a good book, but I think i got it too late, I felt the prices of reits and really too high and yields too low now.
Reits as an assets have their risks too, I felt most of the better quality reits offer no margin of safety or didn't compensate enough in terms of yields, like the mapletree china reit, 5% yield only and ppl are still chasing up the price, depressed the yield further and it will be just 1 % higher than some coporate bonds (With no risk of capital losses), hope they are right and the reits can keep growing their DPU, otherwise, I felt many will feel the pain sooner or later...
(13-03-2013, 10:48 AM)Greenrookie Wrote: Oh that is a good book, but I think i got it too late, I felt the prices of reits and really too high and yields too low now.
Reits as an assets have their risks too, I felt most of the better quality reits offer no margin of safety or didn't compensate enough in terms of yields, like the mapletree china reit, 5% yield only and ppl are still chasing up the price, depressed the yield further and it will be just 1 % higher than some coporate bonds (With no risk of capital losses), hope they are right and the reits can keep growing their DPU, otherwise, I felt many will feel the pain sooner or later...
I believe the mapletree china reit is more on growth than yield at IPO. Both the DPU growth and China retail story play an important part of IPO performance IMO
REIT is for yield, rather for growth. This is what i know, may be i am wrong, so need to brush-up...
(13-03-2013, 10:48 AM)Greenrookie Wrote: Oh that is a good book, but I think i got it too late, I felt the prices of reits and really too high and yields too low now.
Reits as an assets have their risks too, I felt most of the better quality reits offer no margin of safety or didn't compensate enough in terms of yields, like the mapletree china reit, 5% yield only and ppl are still chasing up the price, depressed the yield further and it will be just 1 % higher than some coporate bonds (With no risk of capital losses), hope they are right and the reits can keep growing their DPU, otherwise, I felt many will feel the pain sooner or later...
I believe the mapletree china reit is more on growth than yield at IPO. Both the DPU growth and China retail story play an important part of IPO performance IMO
REIT is for yield, rather for growth. This is what i know, may be i am wrong, so need to brush-up...
most of the REITS in singapore are trading at very high valuations.
I am looking around for some bargains & REITS are not one at the moment.
Keep on looking. patience is the nasme of the game
Actually I am not even sure why people are looking to REITs as an investment target and not other types of companies. Is there seriously so much hype over REITs?
Granted the sector performed well last year (+30% to 40% increase in share price), but can this be repeated?
(13-03-2013, 05:20 PM)Musicwhiz Wrote: Actually I am not even sure why people are looking to REITs as an investment target and not other types of companies. Is there seriously so much hype over REITs?
Granted the sector performed well last year (+30% to 40% increase in share price), but can this be repeated?
I think well managed REITs like FCT or Plife REIT (and even Suntec REIT) have provided superior returns to unit-holders since listing.
FCT (IPO June 2006)
IPO Price: $1.03
Dividends Collected: $0.5173
Current Price: $2.11
Total Gain Percentage: 155% or a very crude CAGR of 15% p.a
Plife REIT (IPO Aug 2007)
IPO Price: $1.28
Dividends Collected: $0.4554
Current Price: $2.40
Total Gain Percentage: 123% or a very crude CAGR of 16% p.a
I don't think this reflects a bad investment return. It probably outperformed many of our investments in that period.
(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Ah Nick, you should be comparing that return against other companies in other sectors though, to see if returns are comparable. You've picked the better managed REITS, how has the sector returned on average if you include good and lousy ones?
Another more important question would be - can the stated historical returns be replicated moving forward? With yield compression and more and more REITS flooding in, I am watching to see.
(13-03-2013, 05:38 PM)Musicwhiz Wrote: Ah Nick, you should be comparing that return against other companies in other sectors though, to see if returns are comparable. You've picked the better managed REITS, how has the sector returned on average if you include good and lousy ones?
Another more important question would be - can the stated historical returns be replicated moving forward? With yield compression and more and more REITS flooding in, I am watching to see.
(13-03-2013, 05:38 PM)Musicwhiz Wrote: Ah Nick, you should be comparing that return against other companies in other sectors though, to see if returns are comparable. You've picked the better managed REITS, how has the sector returned on average if you include good and lousy ones?
Another more important question would be - can the stated historical returns be replicated moving forward? With yield compression and more and more REITS flooding in, I am watching to see.
I think one can simply compare with the STI Index -
STI on 5 Jul 2006: 2424
Current STI: 3289
Percentage Gain: 35.7% (contrast FCT 155% return)
STI on 23 August 2007: 3370
Current STI: 3289
Percentage Loss: (2.4%) contrast with Plife 123% returns.
Since the STI represents the blue chips listed in SGX, I view it as a decent benchmark. Both REITs not only outperformed the biggest companies listed in SGX - they did so by a wide margin ! Why I choose the best REITs listed here ? Simple - we are investors and we want the best. I think even if we compare the worst S-REIT with the worst company in each sector, the REIT wouldn't look as bad. One can easily verify whether has the individual stocks in his / her portfolio held from 2006 / 07 till date provided such returns. If yes, then of course, REITs would be a poor asset class to own during the past 7 years. If not, I don't see why one should immediately lambast an asset class with pretty decent returns over the years and with an easy to understand business model. One of my biggest mistakes was selling my REITs in 2011 - missed the entire bull run. Granted, I am not saying one should go and start loading into REITs now - like everything, there is a value.
(Not Vested in any REIT)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
13-03-2013, 06:36 PM (This post was last modified: 13-03-2013, 06:45 PM by Boon.)
Here were the returns of some of the S-Reits since their IPO but only up to end of August 2012. Since then, most of their share prices have gone up considerably - useful reference nevertheless.
(13-03-2013, 06:36 PM)Boon Wrote: Here were the returns of some of the S-Reits since their IPO but only up to end of August 2012. Since then, most of their share prices have gone up considerably - useful reference nevertheless.
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