Singapore REIT - grow your wealth steadily

REIT is still one of the best ways to grow your wealth.
REIT offers you exposure to commercial property that you can't normally invest in.


What is REIT?

A Real Estate Investment Trust ('REIT') is a vehicle that raises capital to purchase a portfolio of real estate assets, usually with a view to generate income for unit holders. Units of listed REITs are bought and sold like any other securities listed on exchanges at market-driven prices.

The underlying assets of a REIT could include commercial, retail, industrial and residential properties located within a specific country or region.

Most REITs are structured around large properties and typically own multi-property portfolios with diversified tenant pools. With REITs, individual investors can own stakes in such properties, thus reducing the risks of reliance on a single property and tenant.


Why REIT?
A REIT typically distributes dividends to unit holders at regular intervals based on the income generated by properties in its portfolio.

Most of the REITs’ revenues are derived from rental payments under contractually-binding lease agreements with a specific tenure. It is thus important for investors to study the occupancy rates of properties acquired by REITs.

REITs give investors the opportunity to buy into properties managed by professional property management companies.

Most REITs have annual managers’ fees, property management fees, trustees’ fees and other expenses. The cost of such fees will be deducted from investors’ original cash yields before distributions are made.

Some benefits of investing in REITs include portfolio diversification, income distribution, participation in the property market and professional management.

Investors should study the specific REIT’s prospectus to understand its investment objective and details of the properties to be acquired before making an investment decision.

Risks Of Investing In REITs
As with all financial market investments, investing in REITs involves a certain level of risk. Here are some risks to take note of before you start investing in REITs.

Market Risk

Investors are exposed to market risk or volatility of the specific underlying asset which constitutes the REITs. Macroeconomic conditions may directly or indirectly result in property price fluctuations, affecting investment outcomes.

Foreign Exchange Risk

When the constituents of REITs are priced in one currency (e.g. USD) and are different from the functional currency of the investor (e.g. SGD), investors are exposed to fluctuations in foreign exchange rates, which may increase or erode investment returns on the trust.

Interest Rate Risk

Refers to the risk that an investment's value will vary due to a change in the absolute level of interest rates, the spread between two rates, the shape of the yield curve or in any other interest rate relationship. The change of interest rate will also affect the income of REITs as interest expenses are one of their major costs.

Debt Financing risk

REITs typically use debt to finance their properties. Investors are exposed to higher risk when REITs are over-leveraged (high gearing level). In addition, the debt profiles of REITs also determine their sustainability under different interest rate environments.


Important:
The key to successful investment in REIT is to do proper research and analysis of the REIT performance, growth and the current management of the company.



10 amazing advantages of investing in REIT that many regular investors do not know about:

• Regular income for good REIT
• E.g quarterly, bi-annually, annually
• Receive dividend on time vs real estate rental payment by the tenant that may not be consistent or even default payment
• REIT also has capital gain - similar to direct investment in real-estate
• One of the best way to grow your passive income
• REIT saves you more time and cost versus direct investment in actual real-estate
• Diversification through different properties
• Diversification through different sectors
• E.g retail, hospitality, medical, data centre, tourism, office, logistics, warehouse, industrial, education
• Low capital to participate
• Can start as low as RM100 monthly for regular investment, but gain exposure to a multi-billion dollar of property investment
• Exposure to many different asset class
• E.g Commercial property, hotel, resort, big shopping mall, land, offices, university
• Can diversify to many different regions
• E.g Malaysia, Singapore, Indonesia, Japan, Australia, US, Europe, China, HK etc
• Good management by good property management

Singapore REITs Summary & Performance

Here is one of the assessments of Singapore REIT by Maybank:

https://malaysiainvestment88.blogspot.com/2020/01/singapore-reits-performance-summary.html

Singapore REIT offers one of the best growth in the world.
It is also one of the biggest in terms of market cap up to USD 70 billion!

How to invest in REIT

You can invest through:

• Direct purchase in the stock exchange, similar like buying stock
• In this way, you are buying one REIT at a time
• While an individual REIT do offer diversification, it is of slightly higher risk as you are exposing to an individual REIT only. Best to build a portfolio of REIT this way.
• Therefore, it will take you some time and effort to do proper research
• You also need to pay the commission fees to the brokers, therefore proper calculation of the fees and profit and important as it will impact the yield return
• Through unit trust
• The benefit is that you can save time and effort as there will be a professional management team to help you to manage the portfolio
• Offers much better portfolio and better diversification
• Performance can be optimised
• With such convenience, you do need to pay some low management fees

Happy Investing 😀



Reference:
https://malaysiainvestment88.blogspot.com/2020/01/singapore-reits-performance-summary.html
https://sreit.fifthperson.com/
https://www.bloomberg.com/opinion/articles/2019-09-18/singapore-s-data-center-reits-strike-big-payoffs-for-investors?srnd=premium-asia
https://www.maybank-am.com.my/documents/191091/522700/Maybank+Singapore+REITs+Fund.pdf/305224d2-4ec4-4d5d-9af4-1c220bbe96e4
https://www.bloomberg.com/quote/MSRMYRH:MK
https://www.maybank-ke.com.sg/products-services/products-services-listing/real-estate-investment-trust/


To start investing and grow your wealth, contact
Mr. Lip Kar Lock, Unit Trust Consultant (UTC)
Phillip Mutual
+6012-3243498
lip.kar.lock@gmail.com

Click below to Whatsapp to get more information:
https://wa.me/60123243498

You can also contact me if you have any question for understanding and knowledge purposes.


Cheers!