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3 Types of REITs in the Singapore Stock Market

Singapore is a hotbed for real estate investment trusts (REITs). We have some of the highest quality and highest yielding REITs in the region. However, there are more than 40 REITs in the Singapore market alone. With so many choices to choose from, it can be rather confusing. So how should we start?

One way to begin is to know the type of REITs that you are interested to invest in.

Here are some of the main types of REITs available in the market.

Retail REITs

Singapore is the shopping capital of Southeast Asia. Tourists fly from all over Asia to come to Singapore for the Great Singapore Sale. It is not surprising to see that some of the largest retail REITs are located here as well.

Retail REITs are investment trusts that focus on owning retail assets such as shopping malls. These REITs are the landlords of the retail malls in its portfolio. Many earn their rental through a fixed rate from the tenants, but there are some retail REITs that take a percentage of the revenue generated from the tenants as well.

Commercial REITs

Commercial REITs usually own commercial buildings like office towers. These REITs own and manage office buildings that serve a wide range of industries. Commercial REITs are typically more stable than retail REITs as companies tend to move their offices less frequently than retail shops.

Industrial REITs

Another type of REIT is the industrial REIT. These REITs would be focusing more on industrial properties such as warehouses, factories, and even business parks. They serve businesses that are more capital intensive and the period for the rental can be much longer compared to the previous two types of REITs.

Foolish Summary

These are the three main types of REITs in the market. Each of them offers a different kind of exposure. Retail REITs are more exposed to the consumer market while industrial REITs might have more exposure to the manufacturing or export sector.

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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 Stanley Lim doesn’t own shares in any companies mentioned.