General S-REITs Discussion Thread

[sky1978]

I believe Sreits shd be compared to our 10y SGS and also their borrowing cost (whether peak liao) which will affect their dpu.

Let say our 10y SGS average 3% for next decade, what should be the ”correct” yield for our reits etf like CLR/CFA?

6%? 6.5%?

Our SORA rate only impacts the portion of their unhedged debt. Assuming it is an SG assets-dominated REIT and borrowings mostly in SGD, the relevant rate is the 3/5-year swap rate because a big portion of their debts are hedged. If we have no access to the SGD swap market rates, the best comparable rate should be the SG govt bond yield. Today, the 2-year and 5-year govt bonds increased to 2.86% and 2.90%, if their margin is approx 100bp, their re-entry into the swap position will result in an all-in rate of under 4%. If they had done a few months earlier when rates were 2.50%, it would get them down to 3.50% all-in. But even at this level, it doesn't provide any significant reduction in interest expenses unless it squeezes the bank's margin below 50bps. If we take one of the biggest REITs with office + malls as an example, they reported an average interest rate of 3.5% for 1H 2024, so if the swap rate hovers around the 3% range, a 50bps spread won't help reduce the interest expense and we don't even know if their spread is 50bps or 100bps, will need to dig it out from their annual report or ask them.

 

[limster]

https://www.businesstimes.com.sg/co...k-among-those-highest-net-retail-inflows-2024

RETAIL investors have been net buyers of Singapore real estate investment trusts (S-Reits) in 2024 amid volatile performance for the sector during the year.

These investors bought some S$1.6 billion net across the sector in 2024, taking their total net inflows into S-Reits over the past five years to more than S$6 billion.

Across the broader Singapore market, the Reit sector had the highest net retail inflows in 2024, followed by real estate (excluding Reits), which had about S$400 million in net inflows.


Meanwhile institutional investors were net sellers of S-Reits, with S$1.6 billion in net outflows in 2024.

Interesting, institutional investors dumping, retail investors buying

 

[homer123]

Warning on FLCT

 

[DevilPlate]

https://www.businesstimes.com.sg/co...k-among-those-highest-net-retail-inflows-2024



Interesting, institutional investors dumping, retail investors buying

All chasing US market to beat SPY returns

 

[DevilPlate]

SReits Winter finally over?
Or another dead cat bounce

 

[limster]

SReits Winter finally over?
Or another dead cat bounce

I have bought shares in about 10 different counters this year so far, and none of them are SREITs.
If institutions are dumping SREITs on retail investors, then the next big move upwards will occur when institutions start re-entering the SREIT market and so far I think institutions all piling into US market like you noted.

 

[peachmouse]

Buying/Holding reits imply that you are betting on interest rates holding steady / getting lower in the future.

During 2010 - 2021, reits have done very well, as interest rates are either steady or declining most of the time.

Currently, I hold a few reits, but not a lot, for yield and diversification purpose. I do not intend to buy more reits, as I am not sure of the interest rate environment.

 

[yslvlys]

I have bought shares in about 10 different counters this year so far, and none of them are SREITs.
If institutions are dumping SREITs on retail investors, then the next big move upwards will occur when institutions start re-entering the SREIT market and so far I think institutions all piling into US market like you noted.

Could be too late to enter then when institutions start to reenter.

 

[limster]

Could be too late to enter then when institutions start to reenter.

thats why my approach is to split my money between US market and others. make sure a decent amount goes to MSCI World (which is >50% USA), and try my luck with other stocks that are 'undervalued' by traditional FA methods.

but if you read some blogs, they talk about how some REITs seem to be engaged in value destruction.... so I think only the high quality REITs with high quality management will recover. Those that try to fleece the shareholder when times are bad, why would investors want to jump back on board?

when I see some local blogger portfolios, they are super concentrated in SG REITs which is a mistake from asset allocation perspective.... even if they want to remain solely with SG stocks, there are so many other SG dividend stocks they can buy to diversify, in 2024 even the no-hope Singtel went up by 30% and Comfort Delgro by 10% (dividends added to price gain)

(the 3 banks everyone knows, no need to mention....)

 

[DevilPlate]

thats why my approach is to split my money between US market and others. make sure a decent amount goes to MSCI World (which is >50% USA), and try my luck with other stocks that are 'undervalued' by traditional FA methods.

but if you read some blogs, they talk about how some REITs seem to be engaged in value destruction.... so I think only the high quality REITs with high quality management will recover. Those that try to fleece the shareholder when times are bad, why would investors want to jump back on board?

when I see some local blogger portfolios, they are super concentrated in SG REITs which is a mistake from asset allocation perspective.... even if they want to remain solely with SG stocks, there are so many other SG dividend stocks they can buy to diversify, in 2024 even the no-hope Singtel went up by 30% and Comfort Delgro by 10% (dividends added to price gain)

(the 3 banks everyone knows, no need to mention....)

Not sure about u, i buy Sreits hoping to beat SSB returns nia

Im OK with long term annualised returns of 5%

 

[limster]

Not sure about u, i buy Sreits hoping to beat SSB returns nia

Im OK with long term annualised returns of 5%

I also like good REITs at good prices though most of the REITs I hold have more or less hit my target allocations and I don't plan to add a lot to the existing positions. currently my total REIT allocation is less than 10% of my investment portfolio down from a high of about 20%.

Euro Financials probably make up another 10% of my portfolio and it turns out that they have been better dividend machines than SG REITs, Lloyds - 5%, HSBC - 6%, Aviva - 7%, Legal & General -8.9% (all yields are TTM), but that is not surprising since DBS, UOB, OCBC are also great dividend machines.

 

[DriftKing]

Today all gone back up like the week's waterfall didn't happened. Not going to jinx this again but how's everyones outlook if this will stay and fall back or breakthrough to previous higher levels?

 

[thretiredDad]

Today all gone back up like the week's waterfall didn't happened. Not going to jinx this again but how's everyones outlook if this will stay and fall back or breakthrough to previous higher levels?

it should stay
but might fall back also
however we cannot rule out
that it will go back to previous high level

 

[Dividends Warrior]

Today all gone back up like the week's waterfall didn't happened. Not going to jinx this again but how's everyones outlook if this will stay and fall back or breakthrough to previous higher levels?

REITs would start releasing earnings reports very soon. It depends on whether they can sustain their DPUs and the type of forward guidance provided by management.

 

[ask_yip]

my opinion is should go up from here until Trump announce something that it might hit Aisa and the SREITs

 

[lunafan]

REITs would start releasing earnings reports very soon. It depends on whether they can sustain their DPUs and the type of forward guidance provided by management.

IMHO, results will continue to be bad for most reits

 

[twinbaby]

Is this a good time to buy S-REIT ETF CLR?

 

[Dividends Warrior]

SREITs reporting season is here!

 

[DriftKing]

SREITs reporting season is here!

As much as im vested, I'm pretty pessimistic with the upcoming results

 

[ask_yip]

don't worry, short term pain long term gain