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 Singapore REITS, S-REITS

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plumberly
post Aug 26 2015, 08:25 PM

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In view of the current global dip, plan to invest in REIT and like to do some study first.

Which one is better, M-REIT or S-REIT?

AA
My lay-person's view, thought REIT started at the same time for the 2 countries, I feel that the RE prices have shot up more in Spore, a more matured market there now. Thus limited upside for S-REIT compared to M-REIT. Your view?

BB
Any tax advantage or disadvantage for Msian investing in S-REIT?

CC
Annual dividend for S and M REIT are both around 6% in a study I saw. So no advantage for either one. But maybe S$ advantage. So what is the real advantage in having S REIT over M REIT?

DD
Any other important points to consider?

Many thanks.

plumberly
post Aug 27 2015, 11:54 AM

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QUOTE(Hansel @ Aug 27 2015, 10:45 AM)
My replies :-

AA - Do the MREITs 'swing' their DPUs in accordance with the market ? Dothey abide strictlyby the rule of paying out almost 100% of their earnings every yr regardless of the mkt cycles and the price swings ? I know that SGREITs' DPUs abide strictly and do not fillow mkt cycles and price swings. Unless, of course, if the earnings drop due to mkt downturn effects, then that's a different story.

BB - INvest as an individual or joint account with your wife.

CC - Wait for dips for SREITs, then buy. I saw Al-Aqar REIT has a yield of up to 8% at current price, but will the DPU drop nex year ?

DD - At a glance, I saw most MREITs paying-out the dividends twice a yr. Many SGREITs pay out their divyies 4x per year. It's better to get your money earlier, than you can re-invest faster and not lose out on opportunity cost.
*
Many thanks!

AA
Was not aware of this. Thanks.

BB
Please clarify on the benefits. Income tax reduction?

DD
Good to know this difference.


In your view, do you feel that the upside in S REIT is limited due to its high prices now (compared to Msia)?

EE

Is there a REIT index I can follow?

Many thanks.
plumberly
post Aug 27 2015, 01:19 PM

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QUOTE(Hansel @ Aug 27 2015, 12:43 PM)
YOu are most welcome,... plumberly,...

Further on BB : Yes, if you invest as an individual or in an individual joint account, you will get the whole amount of the DPU as declared, ie NOT TAXED at all for now. DPU = Dividend Per UNit. Otherwise, if you invest as, say a company, you may be subjected to a certain percentage of tax on one of the three components that make up the dividend of an SG REIT. Yield Stocks and TRusts may not have these three components of the dividend payout.

Open an individual account with the SG CDP, but you need to do this via a registered SG brokerage. Then you will be regarded as an individual, and will be ableto enjoy no tax status for the time being. IRAS - Internal REvenue Authority of Singapore. IRAS is the equivalent of our Lembaga Hasil Dalam Negeri (LHDN).

Continue to monitor news in the IRAS. As investors in SG, we need to monitor ongoing news and changes in the IRAS. SG Elections are coming....

DD : I am not sure of investing in MREITs yet,... and for me, I am more keen on the ability of a REIT to be able to grow its dividend based on further acquisitions and asset enhancement initiatives (AEIs). If you buy now, you will get around 6 to 7% yield for some REITs, eg FREIT. BUt as the DPU grows, you will enjoy a higher yield.

Then the question becomes, how will the DPU be able to grow ? For FREIT, availability of a strong pipeline of healthcare assets for purchase based on a Right-of-First-Refusal (ROFR) basis.

If the above are satisfied, in SG, the price of the REIT WILL GROW as time goes by.

EE : I normally use this : http://www.marketwatch.com/investing/index...?CountryCode=xx

... but I also 'normally' take a bottoms-up approach to SG REITs investing, ie, I target directly the company concerned, rather than target the company from a macro view downwards.

Nope the above helps....
*
Many many thanks!
plumberly
post Aug 27 2015, 06:02 PM

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QUOTE(Showtime747 @ Aug 27 2015, 05:33 PM)
AA
I don't think just because it is a more matured market, the upside is limited. Just take last week and this week for example. Sreit down so much, and recovered very strongly this week. Whereas Mreit is still relatively quiet. The KLCI rebound only apply to those component stock. Mreit does not enjoy the ride. So, Those who enter Sreit last week make a lot of money this week. Mreit opportunity is still waiting for you to enter if you dare  brows.gif

BB
No tax for individual for Sreit for Both distribution and cap gain. While Mreit has 10% withholding tax

CC
Look at the link AVFAN provided to get an idea of DPU and yield from both Sreit and Mreit. I think Sreits nett yield after tax is better

DD
As Malaysian, if you invested before the RM depreciation, you enjoyed better return from forex than the DPU. Actually for the last 3 months, forex alone you would have made >10% (2.6xxx to 3.xxxx). For long term it is a hedge against RM

But do take note if you use local platform to trade in SGX, the cost is higher. Also there are cost for dividend distribution. Also sometimes the forex rate spread is not favorable. If it is not troublesome, try to open a trading account in Sg
*
Very informative! Many thanks.

 

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