The Weekly Nibble: REITs in Focus

Here are three articles on real estate investment trusts (REITs) that have appeared on The Motley Fool Singapore’s website this week that you may have missed out on.

10 Key Things Investors Should Know About First Real Estate Investment Trust’s Latest Investor Presentation

Recently, First Real Estate Investment Trust (SGX: AW9U) held a webinar, and my Foolish colleague, Chin Hui Leong, attended it. He gleaned many useful insights from the presentation and he has shared them in his write-up.

One aspect I like about the REIT is the lease structure; all the properties are under master leases, have rental escalations and are on a triple-net lease.

I was surprised to learn that the unitholders of First REIT would have achieved an annual gain of 21.3% (including distributions) if they had invested in the REIT during its initial public offering (in 2006), participated in the 2010 rights issue, and held all the way till mid-February this year.

What Investors Should Know About Mapletree Logistics Trust’s Latest Earnings and Valuation

In this article, Lawrence Nga investigates Mapletree Logistics Trust’s (SGX: M44U) financial performance for the third quarter ended 31 December 2017, and its valuation using the price-to-book ratio.

The REIT looks attractive with a distribution yield of around 6.3%. However, there’s more than meets the eye. Investors looking to buy the trust must look at other aspects of it such as the sustainability of the distributions, capitalisation rate, gearing ratio, and so on.

3 Ways REITs Can Grow Their Distributions

There are many ways REITs can grow but Jeremy Chia, in his article, focuses on three aspects. They are:

a) By having step-up rental contracts (e.g. First REIT);

b) By increasing their gross floor area; and

c) By converting low yield space into higher yield space.

Can you think of other ways REITs can increase their distributions to unitholders?

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of First Real Estate Investment Trust. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.