Everyone thinks the REITs prices will fall so everyone acted the opposite...that's why it didn't

You are correct as long not far from our current average price is viable tocollect.
I collected IGBreit recently during the fall. The same i will do to other stock or reits.

Somehow, that makes a lot of sense. Darn it, guess I will have to wait.



Same with IGBREIT for me. Was looking at other REITS like SUNREIT and PAVREIT, and honestly I really miss the gravy train.

This post has been edited by CheesePie: May 10 2013, 11:26 AM

Why is the focus on Retail REIT driving the prices so high...

maybe ppl like retail mall compare office reits, then 100 occupancy and parking full.

AXREIT (office) has also gone up a lot

Retail REIT is generally less risky. Even during recession, people still want to go shopping.

My opinion is exactly like what river has said. No matter what happened, people still want to go shopping.

Although when it comes to office REITs, I think its starting to lose its attractiveness due to the excessive supply of office buildings.

REITs, Trusts and Stapled Securities


What is the difference between a REIT and a Property Trust? What about REITs and Stapled Securities?

Real Estate Investment Trusts (REITs), Property Trusts and Stapled Securities are three different vehicles that a security investor can get into property investments. But some investors are fond of using these terms loosely without understanding the fundamental differences between them. In fact, it is not uncommon to see even respected mainstream media confusing these terms and using them interchangeably and inappropriately.

It does not help that these terms are not regulated by the authorities. A REIT could call itself a Trust and similarly a property trust could call itself a REIT without having the obligation of operating as one as per the guidelines stipulated by regulators.

In this article we will present to you the key differences between these 3 types of securitized real estate investments and why it matters that you understand the nature of each carefully in order to make an informed investment decision.

REITs

In most jurisdictions, in order for a collective property investment to call itself a REIT it must pay out a minimum of 90 percent of its rental income to unit holders annually. This comes on the back of requirements of minimum assets sizes and restrictions on business activities. REITs are also subjected to limits on the amount of loans that they can take. In Singapore, the gearing limit is 35 percent for REITs with a credit rating and 60 percent for REITs that are unrated.

The regulations imposed on REIT are enforceable by the authorities and listed REITs are subjected to a high degree of transparency and scrutiny by the government and unit holders alike.

With so much restrictions, why does a collective property investment bother to go through the trouble of manifesting itself as a REIT? The short answer - favorable tax treatments. As long as a REIT satisfies the conditions stipulated by regulators, it is exempted from corporate taxes and duties that are usually leveled against property investments companies. This means more income from your properties overall despite the stricter amount of regulations that you will have to comply with

Property Trusts

Listed Property Trusts are also collective property investments that pool money from unit holders primarily to invest in income producing real estate. Rental income is similarly distributed to unit holders after deducting costs such as management fees and other overhead. Like REITs, Property Trusts are also by collective investment codes and other regulations that may be imposed by the bourses in which they are listed.

However, and herein the most important difference between REITs and Property Trusts, is that Property Trusts are not obligated to pay out a minimum amount of its rental income to unit holders. It is also not subjected to the leverage and asset size limits that REITs are imposed with. This means that should a Trust manager decide that business is bad for a particular year, it may not distribute any rental income and unit holders can be left with no income distribution for the units they hold at the end of the financial year. Property Trusts do not receive the same types of favorable tax rulings that REITs enjoy.

Examples of Property Trusts in Singapore that have often been confused as REITs by the media include the recently-listed Croesus Retail Trust and Perrenial China Retail Trust

Stapled Securities

In the context of securitized property investments, Stapled Securities are listed property investment securities that can be a bundle combination of either REITs, Property Trusts units or even property stocks.

This commonly happens when a securitized property investment vehicle decides to apply a REIT model to a certain segment of its property portfolio while taking on a Trust model for another segment to form a single trade-able unit known as the Stapled Security. In this manner, the manager of the Stapled Security need to be bound by REIT regulations only for the segment of the portfolio that adopts the REIT model. He is then free to pursue other plans for the properties that do not require compliance to REIT regulations. Hence a Stapled Security is obligated to pay a the minimum amount of rental to unit holders only for the properties that are adhering to a REIT structure.

An example of a Stapled Security is Singapore-listed CDL Hospitality Trusts which comprises of CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust. Another prominent example of a Stapled Security in this region is the KLCC REIT in Malaysia that comprises of REIT units and property stocks of KLCC Property Holdings Berhad (KLCCP).

Stapled Securities are similarly bound by listing and reporting regulations that may be imposed the the respective bourses.

These are the salient differences between a REIT, a Property Trust and a Stapled Security. Several more technical differences exist between the three but its full breadth will not be covered by this short article. But the main features covered above will help you to make a more informed decision as an investor.

thanks, a good read indeed.

axis still going up... 3.88!

and amanahraya suddenly goes from 0.93-0.94 to 1.01 - what's happening??

big retail reits, igb, pav, starhill - all seem so subdued, low yield, like no future... only sunreit moving up.

This post has been edited by AVFAN: May 17 2013, 03:09 PM

Yeah, crazy high valuation. Dividend yield is already much less than 5%. I'm sorely tempted to sell now...

AXREIT - 4.00

But DY is still slightly above 5%.

Thank you

ARREIT just sold a prop, earning RM4 mil....

Are we going to get special div or something like that? Or the money will be use to buy new property?

at 4.00, yield is 4.5% only, among the lowest. time to sell?
http://mreit.reitdata.com/

4.5% is gross or net? if gross, net is only 4.05%. So low.

My calculation is based on the total DPU of the last 4 quarters. The DY in the provided link is based on the DPU of last quarter, multiplied by 4.

Of course, what matters is the future DPU which, barring office space oversupply, should not be reduced y-o-y.

Hey, is there any site to check REITS occupancy rate? Or can only check in their annual report? Thanks in advance

you use actual div over historical purchase prices?
if so, the yield is surely be higher since price have moved up so much.
that will overstate the yield as the unrealized cap gain is assumed not to generate any yield.

i prefer the way used in the link, last div annualized over current price to show a current pricture. which then poses the question if the yield has become too low, say <5%, maybe time to sell and put the money somewhere else...