Take an example for the recent rise in quality M-REIT like IGBREIT / PAVREIT.

There are no changes in the business fundamentals ie no new property acquisition, no massive increase in rental revision and so on. But then what makes the share price approaching new high?

Real Estate Investment Trust, REIT, similar to own a property and rent it out. Rental collected from tenants after minus all relevant fees are then distributed to shareholders. Hence it is treated as alternative fixed income instrument, which is sensitive to interest rate environment.

If interest rate increase, it will narrow the yield spread between REIT and other fixed income instrument, which will make REIT less attractive, REIT price go down and vice versa.

Basic economics: 
-stock up, bond down
-Interest rate up, REIT / Bond down.

Now, enough of theory. Lets see some charts :

IGBREIT



PAVREIT



Notice the similiarity? Both REIT are in uptrend and why ?  :





Some more infos :

https://www.cnbc.com/2019/03/20/fed-leaves-...-unchanged.html

https://www.cnbc.com/2019/03/27/us-bonds-gr...-inversion.html

Now you may ask, how about future? Is the uptrend sustainable ? Will it be overvalued ? How's company earning ? Is it consistent etc....
1) First and foremost, rental income is usually stable and predictable, you wont see drastic increase of rental Q-o-Q.
2) REIT upside is usually capped by yield. If the price goes too high while Distribution per unit is stagnant, the yield goes down which will make the REIT unattractive.

Now, search for "Net Property Income" from QR. More net property income -> more cash to distribute to shareholder -> more dividend -> higher Distribution per unit

If you are hardworking, make an excel table to track NPI for every Quarter to get a clearer picture or even better, plot a chart.



The recent acquisition of Pavilion Elite Mall has contributed positively to the REIT. Only non-performing mall is that Da Men.

With all these data / facts / knowledge in hand, one could easily spotted investment opportunity back in March 2018.

Data-driven decision making 

**************************

With current low yield environment, institution / pension fund are looking everywhere for investment opportunities. They are eyeing for some Stable rental return (REIT / BTR) which are inflation link product that are able to track retail price index.

Current REIT price is supported by low interest rate environment as well as stimulus packages that boost the liquidity in the financial market, be it Malaysia or globally.

Now, when things are all rosy and bright prospect (pre-covid IGBREIT or current ALAQAR or GHLSYS or PENTA), definitely the price wont be cheap isn't it? During MCO, retail mall & hotel are severely impacted. This is already known by market that almost all retail & hotel related companies' profitability will be affected across. With the sharp decline of SUNREIT price from 1.88 to current 1.6x level,mostly the effect is price into the share price already.
So can one apply the strategy of buy on weakness and ride on its recovery in this scenario? Recovery can be in terms of appreciation of SUNREIT price + potentially increasing of DPU in the near future. Is this trade rewarding enough? 

Or is there any other attractive opportunity out there?