I had $700,000 invested in Singapore REITS.
I have started to sell $500,000 of the REITS and to keep $200,000.
My reasons are:
a) The REITS now have an earning yield of about 4% but they pay a dividend of 5% (probably due to the higher revenue from past years).
b) I expect the earnings for 2020 (to be announced in 2021) to fall by 20% to 40% due to the impact of the lockdown (i.e. circuit breaker) imposed to control the spread of the covid infection. This is likely to result in a similar fall in the price of the REIT.
c) Some of the REITS have a price that is higher than the asset value per stock. This is grossly over priced. The asset value is likely to be revised downwards over the next two years.
Some of the property stocks have a price that shows a discount of 50% to 75% on the asset value. I prefer to invest in these stocks, rather than the overpriced REITS.
No comments:
Post a Comment