Very true. I don't like stareit. They sold off a very profitable Pavillion KL for a paltry sum and now wants to make it a pure play hospitability reit. I think there is great conflict of interest between management and tenant. Doubt if one can get a fair return on it vis-a-vis other reits.

Plus another RM1 for gomen stamp duty, plus between RM8 to 15 min. brokerage fee, plus a few sens for klse transaction fees.

You mean NTAB or par value? If NTAB it is RM1.27 which means it is already discounted at more than 20%. Where to find a property which is selling at 20% discount these days?

I don't think it makes much difference either way. But keeping your eye on just one or 2 reit is much easier as you'd normally be buying reits for the long term for it's income (dividends).

All Malaysian reits, even Stareit (which I like the least) pays pretty good dividends and offers good value for money. The only one one which is selling at a relatively high premium compared to the other local reits is Axreit (but that's also a damn good reit). But if I only have one to shoot for (not just simply tembak) then I'd put my money on Sunreit. It's currently selling at a slight premium versus it's ntav. But they have not revalued the properties yet, especially after taking physical possession of Putra Place which they bought at an extremely low price of about RM500m at an auction. Once they do up the place, both the income and the ntav will go up.

It's probable the best and most stable (also the biggest reit in Malaysia). They are a property developer outright and thus have all the advantages compared to the other reits which will have to rely on others. Another plus point about Sunreit is that a major shareholder is the Singapore GIC which will have a keen eye on the reit, thus indirectly also ensuring that it's books are properly audited - ensuring that we get our just dividends.

No, I said:
"even Stareit (which I like the least)"

Go for Sunreit. Best chance of success, least chance of failure. Priced at about RM1.15, I think it's a steal. I have to declare that I do own shares in Sunreit, so you may have to discount my advice .

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Added on October 12, 2011, 10:40 pmGood question, hope some tax guru can enlighten us on this, and how to take adventage of the 10% withholding tax already paid by the reit.


This post has been edited by tohca: Oct 12 2011, 10:40 PM

Simply because it is the largest reit in Malaysia. Having a constant high volume is a good thing as it allows you to buy and sell easily. If volume is small, like AHP, it may be a little more difficult to sell your shares.

At the rate you are accumulating these good reits, you'd soon be able to retire comfortably, if you are not already.

Hi Cherroy, I have always been wondering about this. What are the pros and cons of this? Mine is currently as a nominee. While it is convenient, I find that I do not get to go for the company AGMs and other goodies.

Thanks for the replies guys.

That's an interesting thought. Yes it surely is great if we can all chip in our thoughts on this idea. Few things that come to mind is:

1. What is your cost of borrowing? What if the cost of borrowing go up (unless you are on a fixed interest loan)?

2. Repayment of your loan would usually be monthly, while dividends are at most every 3 months, some every 6 months. So how do you plan to service the loan?

3. While the reits so far have been quite consistent on their performance (yield), risk would be if your reit don't perform to expectation.

4. Perhaps if you spread your reits to 4 or 5 perhaps it may lessen the risk. Or perhaps to buy some Singapore reits too to balance up, but then it may not work out if you need to withdraw your dividends to service your loan due to currency exchange losses which may be quite significant.

I am also thinking about this, but not sure if this venture will pan out. So guys, please share your thoughts.

if you are not a resident in Singapore, no need to pay the 7% GST. And the gomen there don't charge stamp duty on buying n selling shares on SGX, unlike in bolehland it is RM1 for every RM1000 or part thereof. So if you buy say 1 lot of RM0.005 share (like a call warrant) you need to pay RM1 stamp duty, but the cost of 1 lot only RM0.50.

If you are planning to buy Singapore reits, I would encourage you to open a SCB online trading account in Singapore. They are taking the market by storm there. No minimum brokerage (currently others charge around S$20 minimum brokerage). Only disadvantage (or perhaps even an advantage) is that it is under SCB nominee account - no direct CDP (equivalent to KLSE CDP) account. So cannot buy IPO.

This is a one time inconvenience to go to singland with some cash with you (I think only S$1000) to open an account there.

This post has been edited by tohca: Dec 17 2011, 08:51 AM

it's actually no different than paying for your share purchases in Malaysia when you trade online. What effectively happens is when you open an online account in SCB (or any other bank really) is that you will have to fill up lots of forms. These forms will basically open for you 3 sets of accounts. A savings account, a settlement account and a trading account - all linked together.

And as the SCB trading platform is on a 'cash upfront' basis, you need to transfer money from your saving account to your settlement account. When a purcahse is done, then the money in your settlement acount will be used to pick up your purchases.

One point I forgot to mention earlier is that the min. lot size is in 1000s and not in 100s like KLSE. So it's still quite a challenge to do dollar cost averaging by purchasing over a period of time, unless of course you have lots of $$ or you pick up mainly penny stocks - and there are quite a few good penny stocks to pick up too. Many of the reits there are under a dollar.

Another thing also is that it will generally take about 2 weeks before you can start to trade using SCB. They are so many levels of authentication and your user id and password will be sent to you in separate mails (not email), and even before that they will call you from Singapore on your mobile to verify that it is really you who have gone to opened up the account. But it is all worth it, as far as I'm concerned.

How do you plan to open a Singapore SCB account? I assume you would have to go there right? Bring the $$ down with you when you are there to open the account la. Subsequently you can TT cash over to that account. But I think it's cheaper to just carry it over the border and deposit it. Definitely worth the trouble, for me at least.

don't forget that you may also lose out on currency exchange rate each time you do a trade, whereas if you have a sump of money you plan to invest in SGX, then you do it only one time. I think the bank's exchange rate is higher than thro a money changer.

In addition to the cross border trading brokerage each time you trade, there is also a minimum S$25 or 30 per contract that you have to pay. And I think they also charge higher comm rate and perhaps GST of 7.5%.

Well if convenience is your priority, then I have nothing to say.

yes, but as you know int rate in sg is negligible, something like 0.1 or so..., but certainly better than DBS. Even their FD is less than 1% /annum. I think most of us who park our money in singland is because we believe it has better potential to appreciate vis-a-vis our RM.

Yes what you have all said about risk vs returns are of course correct. Except that I do not believe that Singapore reits are more risky than reits in bolehland. It's just that markets tend to overact to situations and due to a few unfortunate incidents over at their reits, they are punishing the whole lots of them.

Apart from the leasehold vs freehold factor of these reits, I actually feel sreits being 'safer' than mreits, though I own some of both. Actually more sreits - it gives higher yields and I think it offers better chance of currency appreciation versus bolehland currency, even capital appreciation as it has been overly suppressed already.

Which means? Good time to buy!!

+1 well said.

With SCB online I only trade SGX, but you can trade HK, most major European countries and US markets with it. Thus useful to for checking real time prices of certain counters there. I think it would be less taxing to do research on just one or two exchanges, but you may have more capacity than I. In fact I'd rather just trade stocks on the KLSE and nothing else, but just don't want my money sitting pretty in SG FDs which pays less than 1% /annum.

You can chose either TAC or a token device, both have pros and cons. You do not need a SG number. A Malaysian mobile works just as well.

Hope that answers your questions.

Though this thread is about REITs, and my original purpose was to buy just SG reits with SCB online, but today my SGX portfolio has less than 50% reits. I have around 30 counters and log in once a day to place my orders. I use TA indicators (RSI, stocRSI and MACD) to help me enter and exit a position. I must say than since starting SCB online about a month ago, I've earned (counting realised gains only) many times what SG FDs would have earned me in a year.