Here Are 2 REITs Trading Near Their 52-Week Lows

One of the more popular types of investments in Singapore is the real estate investment trust. Right now, there are over 30 REITs in the local stock market that invest across a wide variety of real estate sectors.

Some of the greatest investors around – good examples are John Neff and Walter Schloss – look at lists of stocks that have fallen hard for potential investing ideas. They believe that some beaten-down stocks may be bargains in relation to their actual economic worth.

Nearly once every week, I run a screen to look for companies in Singapore’s market that are near 52-week lows. In most weeks, REITs will appear on my screen.

So, let’s take a closer look at two REITs I’ve chosen at random from a list of REITs that have unit prices near their respective 52-week lows. The duo are: AIMS AMP Capital Industrial REIT (SGX:O5RU) and Soilbuild Business Space REIT (SGX: SV3U).

Source: S&P Global Market Intelligence

AIMS AMP Capital Industrial REIT, or AA REIT for short, is an industrial real estate investment trust that was listed more than nine years ago on April 2007.

The REIT is currently sponsored by two Australian financial groups, namely, AIMS Financial Group and AMP Capital. As its name suggests, it has a focus on industrial properties. Right now, it has 26 properties in its portfolio, of which 25 are located in Singapore and one in Australia.

AA REIT reported its fiscal second-quarter results (for the three months ended 30 September 2016) just yesterday. Its portfolio occupancy rate had fallen from 96.5% a year ago to 92.7%. It also mentioned that rents and occupancies in the industrial leasing market “continue to be under pressure.”

The next REIT is Soilbuild Business Space REIT, whose principal investment strategy is to invest in income-producing real estate in Singapore that are used primarily for business space and industrial purposes. It currently has five properties in its portfolio.

Soilbuild Business Space REIT’s latest results for the third-quarter of 2016 were released only two weeks ago. The REIT saw its revenue and distribution fall and commented that its market sector is currently “subdued.”

For the reporting quarter, Soilbuild Business Space REIT’s portfolio achieved an occupancy rate of 94.8%, down from the 98.7% seen a year ago.

A Foolish summary

Though the REITs mentioned above are trading near their respective 52-week lows, there is no guarantee that their unit prices will not fall further.

What is important is the business performance of the REITs going forward. Some important areas for investors to look at with the REITs before coming to an investment decision include their property profiles, debt profiles, and quality of management.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.