Real Estate Investment Trusts are seen by many as being defensive and also have the potential to generate income to unit holders.
So, for both investors and potential REIT investors, it could be useful to look at certain metrics in greater detail.
One starting point could be to look at REITs that are trading at close to their 12-month lows, coupled with high dividend yields. Then, follow up with further research to better understand their property profile, management calibre, and also the REITs’ future prospects.
With that in mind, let’s look at 2 REITs that are trading close to its 12 months low and their respective dividend yield.
|Mkt. Cap.in||Price vs. 52||Distribution||Price to book|
|REIT||S$ million||weeks low (%)||Yield||ratio|
|Far East Hospitality Trust (SGX: Q5T)||1,045||0.9%||7.6%||0.62|
|Frasers Hospitality Trust (SGX: ACV)||1,212||1.5%||8.2%||0.73|
Far East Hospitality Trust (FEHT) has 12 properties that comprise eight hotels and four serviced residences. They are strategically located within close proximity of business districts, leisure attractions, MICE and healthcare facilities.
Examples include The Elizabeth Hotel, Village Hotel Bugis, Oasia Hotel Novena, Orchard Parade Hotel and The Quincy Hotel.
The trust recently announced weaker quarterly performance, with gross revenue, net property income (NPI) and distribution per stapled security (DPS) down by 5.5%, 6% and 6.7%, respectively. For more information about the latest quarterly performance, please click here.
Frasers Hospitality Trust, a global hotel and serviced-residence trust with 3,534 rooms across the various properties that it manages in eight different cities around the world, including UK, Singapore, Australia, Malaysia and Japan.
The company’s current portfolio includes hotels such as Intercontinental Singapore, The Westin Kuala Lumpur, Ana Crowne Plaza Kobe, Sofitel Sydney Wentworth and others.
The trust latest quarterly results can be found here, Gross revenue for the full year rose by 17.1% and net property income (NPI) improved by 20.6%. Distribution per stapled security (DPS) came in at 5.23 cents, down by 10.1% from a year ago. DPS was lower due to a rights issues in September 2016.
Though the REITs are trading at 52-week lows, there is no guarantee that the share price could not fall further.
Thus, it is important the investors carry up their own research before committing any capital in the above REITs.
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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.