Investing in REITS

I tend to agree with the comments by the following forumer. I believe REIT is one of the safest investment to do an average down buying tactic, but of course provided that it is not overly priced and the yield must be reasonable. A discount to the NBV provides buffer when the property prices are depressed.

A reasonable yield to me is at least 6% yield, and it should be above the prevailing loan rate. Also, the size of the REIT is very important, large asset base and market cap tend to be safer (although growth may be lower) and the sponser is also important too.

Criteria for REIT
1. Yield > 6%
2. Little premium (or discount is even better) to NBV
3. Large cap, preferably above $1B for long term investment
4. Sponser - ability to acquire new properties - yield accretive investment
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tankie

Joined: 17 Jun 2005
Posts: 477

Posted: Wed Jun 28, 2006 4:12 pm Post subject:

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salz wrote:
So Tankie, which REIT do you recommend us to inest in?

Each of us hv diff risk profile and temperament. So, what works for me may not work for u. In my case, where REITs r concerned, I'm looking for the best yield and discount to NAV. I believe these 2 criterias would provide me w/ some buffer against too much downside risks. At the moment, only AllCo and MMP matches my criterias. Of course I also look at other things like Debts (Gearing and Avg Int Rate), Free Float, ...etc. and somehow or rather, it helps in my selection decision

At the same time, since I'm spending quite a fair bit of time looking at REITs, I also do a bit of trading on the side. At various times, I may also be hldg Suntec, AREIT, CMT and CCT. I think the beauty abt REITs is that if I'm stuck with the counter, at least I'm enjoying rather good yield fm the div

Disclaimer : The above is NOT a recommendation