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Understanding Singapore REITs

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For most retail investors, real estate investment trusts (REITs) offers the best alternative to owning a real estate without the need of forking obscene amount of cash or the hassle of dealing with difficult tenants. But of course, like all investments, there are always pitfalls to watch out for when investing in REITs. In this article, I will share my insights on investing in REITs.

Over the years, the landscape for REITs had evolved significantly, with the change in the regulatory gearing limit, asset enhancement initiatives by the bigger REITs and the emergence of perpetual bonds (Mapletree Logistics Trust was the first REIT to use perpetual bonds in 2012). Against this backdrop, for sure there are REITs that outperformed the rest while there are those which may not worth your time and money.

Over in Sabana REIT, a group of irate investors called for the manager to be removed in 2017 over its poor performance and falling unit price. Although the revolt was unsuccessful, it has resulted in the change of the leadership. What are rules governing the removal of REITs manager and what are the rights that REIT investors can leverage to protect their investments?

Industry trends

Under Monetary Authority of Singapore (MAS), REITs are collective investment schemes that invest primarily in real estates and real-estate related assets. Thus, a listed REIT may consist of multi-properties, such as commercial offices, industrial warehouses, hotels, shopping malls, serviced apartments or even hospitals. In this regard, when investing in REITs, investors should make the effort to study the specific industry trends that could impact the growth of the subject trust.

REITs

For example, in the past few years, there had been a supply issue for the industrial property market in Singapore, causing market leaders like Ascendas REIT to [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: June 6, 2018 — 1:59 am

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