In this complete Singapore real estate investment trusts (S-REITs) guide, we have compiled all the best REIT articles from The Motley Fool Singapore’s flagship website, Fool.sg. These articles touch on a wide range of topics, from the basics of REITs to the risks involved when investing in REITs. We also have a bonus section for readers right at the end.
So, let’s dive right in.
What are REITs?
REITs trade like stocks in the stock market. However, unlike most companies, they own an underlying portfolio of real estate assets in a unique structure (more on the structure later). Therefore, REITs allow investors to gain exposure to the property market with very little money.
REITs generate income from renting and selling assets. The money that is earned is paid out to unitholders through regular distributions, usually on a quarterly basis. REITs are unlike common stocks in that they enjoy unique tax transparency treatment. To qualify for the treatment, REITs are required to pay out at least 90% of their taxable income to unitholders in the same year in which the income comes in. These high dividend payouts make Singapore REITs very attractive as an investment, particularly for income-hungry investors who are looking for passive income.
More information on REITs can be found below:
REITs versus investing in other instruments
REITs are just one investment vehicle available to investors. There are various other investments open to the public such as stocks, property trusts, physical properties, and bonds. In the following articles, learn more about the differences between REITs and the various investment instruments:
- Differences between REITs, property trusts, and stapled securities
- Advantages and disadvantages of investing in REITs versus stocks
- Investing in REITs as compared to physical properties
- Investing in REITs versus treasuries and corporate bonds
REITs are regulated instruments. Check out some of the key regulations that Singapore REIT investors need to know from the article below:
Unlike a typical listed company, REITs are structured differently with entities such as a trustee, REIT manager, and so on. Using Frasers Centrepoint Trust (SGX: J69U) as an example, learn more about a typical REIT structure from the article below:
Different type of REITs available
There are many types of REITs investors can invest in. Jump into the article below to learn about the retail REITs, commercial REITs, and many more:
REIT financial statements
Daunted by the financial statements of REITs? Fret not. The article below distils out the critical information you should look out for in a REIT’s report card.
Unlike listed companies, REITs are valued slightly differently. With the help of Lippo Malls Indonesia Retail Trust (SGX: D5IU) and CapitaLand Mall Trust (SGX: C38U), learn more about the price-to-book ratio, distribution yield and more from the link below:
Choosing the best REITs
Get help with investing in the best REITs through the articles below:
- Factors to consider when investing in REITs
- Identifying REITs that have a strong portfolio
- What to look out for in a REIT’s debt management
- More factors to consider before investing in REITs
Types of REITs to avoid
Not all REITs are made the same. There are some red flags to look out for before investing in REITs as discussed below:
Risks when investing in REITs
The bears are out. Check out some of the risks involved with REITs:
REIT exchange-traded funds
Exchange-traded funds (ETFs) are traded on a stock exchange, just like REITs. The main difference between ETFs and REITs is that ETFs track a specific index. Therefore, the returns of the ETFs would usually be the same as the underlying index. In Singapore, as of August 2018, there were three REIT ETFs, namely, Nikko AM STC Asia REIT ETF (SGX: CFA), Phillip APAC SGX REIT ETF (SGX: BYJ) (SGX: BYI) and Lion-Phillip S-REIT ETF (SGX: CLR). Learn more about the REIT ETFs below:
Commonly used terms in REITs investing
When we invest in REITs, there are lots of acronyms to grapple with. To make your life easier, below is a glossary of commonly used REIT terms:
For sticking on, below are some bonus contents produced for you. We have a useful REITs investing checklist; we discuss what REITs investors should do amid the increasing interest rates, and reveal some REITs that have consistently increased their distributions for the past five years.
- A useful checklist to use when investing in REITs
- Are REITs worth considering with rising interest rates?
- 2 REITs to buy for your parents
- 2 REITs that have increased their distributions to unitholders for five straight years
- 3 ways REITs can grow their distributions
- 2 REITs that give exposure to the fast-growing China property market
Meanwhile, there are 28 surprising and important things we think every Singaporean investor should know—and we’ve laid them all out in The Motley Fool Singapore’s new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge—simply click here now to claim your copy.
Disclosure: The Motley Fool Singapore contributor Sudhan P contributed to this article. The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. At the time of publication (17 August 2018), The Motley Fool Singapore recommended units of Frasers Centrepoint Trust and CapitaLand Mall Trust, and Motley Fool Singapore contributor Sudhan P owned units in CapitaLand Mall Trust.