Analysing REITS

[Boon]

just airing my reading...
The article by KPMG Leonard Ong and Agnes Lo in BT 18Feb 2014, is alarmist.

Boon's 5.6 extract of his iras link is a teaser
And the concern is really eradicated if we read on to para 5.7 of Boon 's link http://www.iras.gov.sg/irashome/uploaded...-05-30.pdf


which in simple terms means S-Reits will continue to receive tax exemption post 15March 2015 from income of its foreign assets acquired before 15 March 2015 as long these assets continues to be beneficially owned, directly or indirectly post 15Mar2015

So....the gate closes for NEW foreign acquistions. The older foreign assets ( pre 15Mar2015) remittance to the trustee in Singapore are still tax exempt.

Is that the motivation First Sponsor, Fraser HTrust rush to list.....they have foreign real estate assets.

can infer what other existing Reits will get hot in their acqusitions trail?

jus my interpretation of the link 's content

6.7
"The tax exemption scheme for infrastructure foreign income will expire on 31 Mar 2017 (unless specifically revoked earlier). Accordingly, where the section 13(12) declaration form is submitted to IRAS after 31 Mar 2017, the infrastructure foreign income will not enjoy the tax exemption, unless the scheme is extended."

Section 5 (S-Reits) is meant to align with Section 6 (Qualifying offshore infrastructure project/asset) - With the alignment, does it mean that the tax exemption scheme for S-reits foreign income will also expired on 31 March 2017, unless extended ?

[lanoitar]

Section 5 (S-Reits) is meant to align with Section 6 (Qualifying offshore infrastructure project/asset) - With the alignment, does it mean that the tax exemption scheme for S-reits foreign income will also expired on 31 March 2017, unless extended ?

My interpretation is the same as 'reggas':

If the CIT is satisfied, the infrastructure foreign income received/to be received in Singapore will qualify for section 13(12) tax exemption for the life of the investment in the qualifying infrastructure project / asset by the entities in paragraph 6.1 as long as the qualifying conditions are met.

[BestPrice]

Is the Singapore REIT rally on its last legs?

http://www.cnbc.com/id/101824806

[Boon]

Section 5 (S-Reits) is meant to align with Section 6 (Qualifying offshore infrastructure project/asset) - With the alignment, does it mean that the tax exemption scheme for S-reits foreign income will also expired on 31 March 2017, unless extended ?

My interpretation is the same as 'reggas':

If the CIT is satisfied, the infrastructure foreign income received/to be received in Singapore will qualify for section 13(12) tax exemption for the life of the investment in the qualifying infrastructure project / asset by the entities in paragraph 6.1 as long as the qualifying conditions are met.

KPMG's interpretation is same as "reggas" on S-reits.

https://www.kpmg.com/SG/en/IssuesAndInsi...201413.pdf

But on "infrastructure project", if the approval is for the life of the investment, what then is the 31-March-2017 dead line for ?

What is the "scope of alignment " on tax exemptions on foreign income between "S-reits" and "infrastructure project" that IRAS is trying to achieve ?

[Samtenk]

If, approaching retirement, you have

- say 3-5 year holding power (ie do not intend to sell)
- a requirement for fairly steady income
- willing to take on a certain amount of risk in excess of bank deposits
- already have bond funds in your portfolio.

then do REITs fit the bill?

And is it quite likely that with interest rates rising, REIT prices will drop in the next 1-2 years.

Thanks.

[LLS]

last year reits already took a major correction
currently reits are trading at around 6% yield which is pretty close to their historical averages
I think maybe the market has already factored in higher rates into the picture

personally I would avoid reits that are highly geared (35% or more) and have weak sponsor

[smallcaps]

3-5 years holding power dun buy equities lah. Later 3rd year drop 30% might panic and sell off...and then after that the price recovers.

[LLS]

actually hold 3-5 years is quite long already
nowadays many investors only hold for weeks or months only

[smallcaps]

No lah, was not talking abt how long people hold their stocks. Talking about how long they are able to. Equities dun have a maturity date and neither do we know how the prices would go in the short term...

[LLS]

even if can hold 10 years, if one is unlucky the 10th year can be another global financial crisis and his stocks goes back into the red
still best to have good margin of safety while collecting decent dividends