Many REITS (real estate investment trusts) give a dividend yield of more than 5%. The rentals are likely to increase over the long term. Even if the rentals drop due to a bad economic situation, the yield will adjust downwards, but will still remain attractive.
I have posted the key financial figures for some REITS, as provided by a stock broker, in the FISCA website (www.easysearch.sg/fisca). They are available for members only. Please note that this is just a brief summary - you have to get more details from your stock broker before you decide to buy them.
Tan Kin Lian
Reits benefit the founders, as they could hold a minority share but have complete management rights of the whole Company. In due process they could cash out their private asset holdings at a huge profit just by injecting them into the REITs they control. This is what Li Kah Sing has been doing with Suntec Reits.
ReplyDeleteThus minority public shareholders are at the mercy of these controlling tycoons, and ending up with highly expensive holdings in the portfolio.
In this respect, as mentioned before, Hongkong investors have much better consumer protection than Singapore. Hongkong have stricter REITs' listing regulations. So, investors here should take care, remember the Minibond case.
Returns from Suntec Reits have been decreasing, ever since tycoon Li had sold his commercial assets into Suntec late last year.
Yes, another problem is they keep issuing rights shares whenever they want to raise capital for acquisitions. Then the share price declines. maybe investors should buy both the reits as well as their spsonsors so they can benefit from asset injections.
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