What are REITs (Real Estate Investment Trusts) A REIT, or real estate investment trust, is a group of properties that are bundled and packaged together under a structure that allows it to be listed on a stock exchange as a tradeable security. The REIT earns a steady rental income from leases signed with their its tenants. REITs are mandated by guidelines as to how they should operate in order to enjoy full tax transparency (i.e. they do not have to pay corporate taxes). One of these requirements is that a REIT needs to pay out at least 90% of its net profit as distributions to unitholders. Another is for regular quarterly reporting that is in compliance with the rules and regulations as stipulated by the Singapore Exchange. A third requirement is that REITs’ gearing level (i.e. total

The weekly 4 Stocks This Week column on DollarsAndSense was started in 2017 with a simple objective was simple: to provide a convenient read each week for busy investors to stay updated with what is happening on the Singapore Exchange. 4 Stock This Week is not a recommendation from us to buy or sell any of the stocks that wke feature. Its purpose is to highlight interesting stocks that investors should be aware of, rather than to analyse these stocks. For this week’s edition, instead of the usual coverage of four stocks, we’ll do a year in review of the other 51 instalments of 4 Stocks This Week that our team has written in 2019. Over the past year (51 weeks), we’ve covered 123 SGX-listed stocks, 4 ETFs and 8 Daily Leverage Certificates. The most covered stock was Sas

Earlier this week on 28 November, both Frasers Logistics Trust and Frasers Commercial Trust requested for a trading halt. According to Bloomberg, Frasers Logistics & Industrial Trust and Frasers Commercial Trust are planning to merge. Should they become a combined company, they will manage close to 100 properties in Australia, Singapore and Europe. This 2019, Singapore has seen its fair share of REITs consolidation. Earlier this year, CapitaLand struck a $6 billion deal with Temasek Holdings for Ascendas and Singbridge. OUE Commercial REIT also agreed to buy OUE Hospitality Trust, and Ascott Residence Trust and Ascendas Hospitality Trust combined to create the largest hospitality trust in the Asia-Pacific region. For this week’s edition of 4 Stocks This Week, we look at 4 different c

REITs are a popular and important part of the Singapore Exchange (SGX). There are close to 50 listed REITs, property-related business trust and REIT ETFs in Singapore. There are also numerous other unit trusts invested into Singapore and foreign listed REITs in Singapore. To get a better understanding of how well or badly Singapore REITs have performed, we dedicate significant time and resources to publish a report card each quarter. If you wish to catch up on previous quarters, you can refer to our regular REITs Report Card column. Read Also: Complete Guide To Investing In Singapore REITs How Has Singapore REITs Performed In The Year-To-Date 2019 To gauge how the Singapore REIT market has performed in the year-to-date (YTD) 2019, we can look at the iEdge S-REIT Index and the iEdge S-REIT

Those who invest in REITs usually go for consistent and stable income. While REITs are normally viewed as yield-related investments, the well-run ones can boast an element of growth as well, achieved through various methods such as asset enhancement initiatives and mergers and acquisitions. REITs with strong sponsors and a history of growing their distribution per unit (DPU) over time can provide investors with the best of both worlds: capital gains over the long term as well as regular, stable cash inflows. The bonus here is not just a gain in the share price of the REIT as it grows its portfolio, but you’ll also enjoy higher DPU over time due to rental appreciation and a higher appraised value of the underlying properties. Here are three REITs to consider if you’re looking f

Throngs of people swarming into a condominium show flat is a pretty common sight here in Singapore. Many locals are enamoured with physical real estate as the last 30 years of nation-building progress has seen the value of property rise at an impressive clip. As a result, many people have become very wealthy by investing in properties. However, I must caution you on two aspects. One is that the economic miracle Singapore went through in the last three decades may not be easily replicated in the next 20-30 years, as the economic, political, and social conditions that created the last miracle may not be present. The other factor is that real estate investments involve a heavy debt commitment on the part of the investor, as that person would have to borrow a significant sum of money in order

The REIT sector has been a surprise performer this year, with total returns of close to 20% year to date. This superb performance has been underpinned by a combination of low interest rates, ample liquidity, and continued strong operating performance for many REITs. Many investors have been surprised by this as the REIT sector is a mature one, with not many expecting it to outperform the benchmark index. However, another important question is, should investors start to trim their portfolios as REIT valuations head higher? After such a stellar performance this year, is there any upside left for investors? Perhaps the sector has run ahead of itself and is poised for a very painful and abrupt retreat. The above questions might be swirling in many investors’ minds, as several friends ha

Though there are many different kinds of businesses out there, only a few of them are able to pay out a consistent and predictable dividend. These types of businesses have stable operating characteristics and/or consistent demand for their products and services, which allows them to generate large amounts of free cash flow that can be used to pay out steady dividends. Income investors generally embrace such companies as their predictability and stability offer both peace of mind and a steady stream of dividends. However, investors should also note that such businesses could occasionally be subject to disruption from technology or new competitors, and there is still a constant need to keep an eye on the business to ensure it still enjoys great economic characteristics. Here are four types

Technical Analysis of FTSE ST REIT Index (FSTAS8670) FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) is currently trading in a Symmetrial Triangle consolidation pattern on an uptrend. The REIT index has little change from 927.94 to 929.69 (+0.19%). So far 50D SMA proves to be a good support.  Previous chart on FTSE ST REIT index can be found in the last post Singapore REIT Fundamental Comparison Table on Sep 6, 2019. Based on the current chart pattern and and momentum,  the sentiment is BULLISH and the trend for Singapore REIT direction is still UP. Breaking out from a symmetrical triangle will send the REIT index to march towards the minimum target of 970.   Fundamental Analysis of 41 Singapore REITs The following is the compilation of 41 REITs in Singapore with

Choosing the right REITs can be a tough task, as the REIT universe has expanded greatly in the last 10 years. REITs of every shape and size have popped up, while a few mergers have also taken place, making it a more plentiful but also confusing landscape for the enterprising investor. For myself, I prefer to look for REITs with great track records of paying consistent or growing distribution per unit (DPU) as well as clear growth catalysts. These catalysts could include recent acquisitions or a boost in footfall within the properties they own, which will eventually result in positive rental reversions. Identifying such REITs can take some time and effort as you work to develop a solid investment thesis. Investors who are keen to grow their dividend income over time might want to look more

Frasers Centrepoint Trust (SGX: J69U), or FCT, is a REIT with property portfolio comprising of suburban retail properties in Singapore. Recently, I came across FCT’s latest investor presentation and found it to be highly informative. In particular, there are two simple charts that will be useful to demonstrate why FCT is a solid REIT. Financial track record Source: FCT’s Investor Presentation There are a few interesting things to note here. To start with, FCT grew its revenue and net property income (NPI) in almost every single year, with the exception of 2016 and 2017 (mainly due to asset enhancement in Northpoint City North Wing). In the last decade, NPI has grown at a compound annual growth rate (CAGR) of 9.3%. Such a growth rate is quite impressive for a REIT, e

VICOM Limited (SGX: V01) is Singapore’s leading test and inspection services centre. The group was incorporated in 1981 and listed on the Singapore stock exchange in 1995, and has, over the years, greatly expanded its range of services to include testing and inspection in fields such as mechanical, biochemical and non-destructive testing. VICOM is a subsidiary of ComfortDelgro Corporation Limited (SGX: C52), the world’s second-largest transport company. VICOM’s business mainly centres on conducting vehicle inspections as mandated by the Land Transport Authority (LTA) and has a dominant market share in Singapore of more than 75%. The other major player in vehicle inspection is STA Inspection, which is a member of Singapore Technologies Engineering Ltd (SGX: S63) and has f

Frasers Centrepoint Trust (SGX: J69U), or FCT, is a real estate investment trust (REIT) with a portfolio comprising of the following suburban retail properties in Singapore: Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), Anchorpoint, YewTee Point, Bedok Point, Changi City Point, and Waterway Point (one-third interest). It also holds a 31.15% stake in Hektar Real Estate Investment Trust (KLSE: 5121), a retail-focused REIT in Malaysia. There are two things to know about the REIT right now: its latest financial performance and valuation. Financial performance Here is a table showing important items from FCT’s financial performance for the third quarter of financial year ending 30 September 2019 (FY19). Source: FCT Result Presentation Overall, we c

Globally, real estate investment trusts (REITs) have performed well this year. The low-interest-rate environment and uncertainty surrounding geopolitical events have seen investors flock to the safe havens of REITs. It is, therefore, no surprise to see that two of the three best-performing constituents of the FTSE ST Mid Cap Index over the first eight months of 2019 were REITs. The two REITs were also rewarded with inclusion into key indices that will increase their profile to investors. Mapletree Commercial Trust (SGX: N2IU) will replace Hutchison Port Hldg Trust (SGX: NS8U) in the Straits Times Index (SGX: ^STI), while Frasers Centrepoint Trust (SGX: J69U) will become part of the FTSE EPRA/NAREIT Global Real Estate Index Series.  Here are some things to note about the Mapletree Com

Since I bought Frasers Logistics and Industrial Trust (SGX: BUOU) last year at an average price of S$1.05, its units have climbed around 15%. Despite the run-up in price, I still believe it remains an attractive investment. With that in mind, here are three reasons why I intend to hold on to this industrial-focused real estate investment trust (REIT) for now. Favourable leases Frasers Logistics and Industrial Trust, which is backed by property giant Frasers Property Ltd (SGX: TQ5), boasts a solid portfolio of properties with favourable leases. As of 30 June 2019, it had 59 Australian properties and 22 European properties.  The properties in Australia have a weighted average lease expiry of six years and negotiated annual rental increment of 3.1%. 92% of its European properties a

Amidst the widespread sell-offs in global equities including the Singapore blue chips, S-REITs showed resilience. High yields, along with a retreating interest rate outlook, gave investors a compelling reason to remain invested. As the trade war between the US and China escalates up a notch, central banks around the world (from the US to EU and China) have been shifting to more accommodative policies to sustain the shaky economic environment.  Relative to other major bourses, S-REITs are amongst the highest yield, making them even more attractive. Given this backdrop, here are three S-REITs to go long on in spite of the weak outlook.  Ascendas REIT Within the industrial space, the market seemed to have consolidated and both demand and supply are now more supportive. While still susceptib

While most investors invest in REITs to obtain a steady stream of dividend income, the fact is that REITs also grow over time, either through organic means (through asset enhancement initiatives or renovations) or through mergers and acquisitions. Acquisitions are a favoured method because it will instantly provide a boost to both asset size (and value) and usually also comes with an increase in distribution per unit (DPU). Investors need to be discerning though – not all acquisitions are beneficial for the REIT. Some assets may be sub-par, and even for quality assets, REITs may also end up over-paying for them, resulting in value destruction for existing unitholders. Investors should carefully size up the facts and figures relating to each acquisition to assess if it boosts the ove

As one of the most popular investments in Singapore, we keep a close eye on the performance of S-REITs. After the corporate earnings announcements each quarter, we compile a comprehensive summary on our REITs Report Card column. How Singapore REITs Share Prices Have Fared In 2019, So Far Before we look at how individual REIT prices have moved, let’s look at the broad S-REIT indices in Singapore. There are two main indices – the iEdge S-REIT Index and the iEdge S-REIT 20 Index. The iEdge S-REIT Index comprises all the REITs listed in Singapore, while the iEdge S-REIT 20 Index, as its name suggests, only comprise the 20 largest and more tradeable REITs on the iEdge S-REIT Index. Read Also: Complete Guide To Investing In Singapore REITs The chart below depicts the iEdge S-REIT Index fluc

The Trade War is escalating.You can feel that coming as investors as you read the news that both Trump and Xi had continuously been playing a game of cat and mouse and it appears there's no way both could get a mutual agreement that might compromise one another.Last night was a bloodbath as Dow was down more than 600+ points while Nasdaq had fallen by 3%.It's pretty drastic in my opinion, but we are getting the hang of it with Trump.Up 2% on one night, down 3% the next day, and then up another 2%, and then down another 3%.Monday is going to be interesting especially for our STI index which is still at 3,110, and are still up by about 4-5% (inclusive of dividend) year to date.Not cool at all given we want a bigger drop like the ones we've seen most recently in 2016, at the very least.The ye

Frasers Centrepoint Trust (SGX: J69U) and CapitaLand Mall Trust (SGX: C38U) are both real estate investment trusts (REITs) that own a portfolio of shopping malls in Singapore. Over the last five years, CapitaLand Mall Trust has seen its share price rise 31.5%, while Frasers Centrepoint Trust’s shares have clocked a gain of 37.2%. Both companies have given long-term investors plenty to smile about when we consider that each of them have paid out consistent dividends throughout the years. Coupled with the fact that the SPDR Straits Times Index ETF, a low-cost exchange-traded fund that tracks Singapore’s stock market barometer, the Straits Times Index, delivered a cumulative gain of just 15.4% over the same period. But which retail mall makes the better investment over the next f