Monday, May 20, 2019


Date: May-20-2019

Shareinvestor's annual REITs Symposium was held on 18 May, 2019. It is the fifth of such annual symposiums by shareinvestor, and the first time held at MBS. Being a member, I happily attended the whole day event with my complimentary ticket.

According to the co-organizer REITAS, who boasts 75%(per market cap angle) of SGX listed REITs as its members, the annualized return of REITs in Singapore has at least double that rate of STI index in the past couple of years(citation sources??).

Real estate investment trusts (REITs), usually offers investors a yield of 5-8 per cent, as one of the speakers, Kenny Loh put it:
- Distribution Yields
- Gearing ratio (<45% SGX regulation, Debt/Total Asset)
are the three key factors to consider when invest into REITs.

Reits were introduced in Singapore in 2002, CapitaMall Turst. REITs business model is based on distribution of rental income from the underlining real estate(property concerned). REITs have at least 90% of the coming distributed to unit holders, under such circumstances, such investors will not be taxed on the distribution income thus obtained.

Logically, given there are fees charged by trust manger who manages REITs on behalf of trust investors, distribution amount should be less than the NPI(Net Property Income) . For instance:
- Eagle Hospitality Trust, based on Motley Fool's article,
 "3. Net property income (NPI) was US$47.4 million for 2018 but is projected to rise to US$51.1 million this year. For 2020, NPI is projected to hit US$81.3 million. US$174 million had been spent on capital expenditure since 2013, and the REIT has earmarked a further US$18.6 million for more asset enhancement initiatives (AEIs)."

 while after all cost and tax deduction, the income available for distribution is 37.229mUSD, or 4.27 cents per Stapled security, thus it is only an annualized 8.2% on 0.78(USD) IPO price.
* Annualized by extrapolating the forecast figures over a full financial year

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