General S-REITs Discussion Thread

[ctan84]

Crypto bros also laugh at SPY buy and hold peeps

Never ending comparison

Then the Illuminati is laughing at all of us for being part of their financial plan and control to usher in the 1 world gahmen. True story, my in-laws swear by that.

 

[DevilPlate]

Then the Illuminati is laughing at all of us for being part of their financial plan and control to usher in the 1 world gahmen. True story, my in-laws swear by that.

Thats why all these boliao hindsight comparison

I still remember alot of Sreits fans were laughing at us (condo landlords) during 2013-2019 period.
Simi Sreits truly passive lah, resi condo rental yield so low lah etc etc

 

[thretiredDad]

Dividends form part of the total return, theres nothing special about an asset that pays a dividend, what matters is total return.

I think the good thing about sreits is that they tend to be less volatile than most other equities (in general), in return you get lower returns, its a fair deal.

must also factor in
REITs can do dilution
from private placement
or right issues
give you divided
but take back money later

Many mistaken REITs as bonds
bonds gives coupon
and at least goes back to par value
after maturity

for REITs
yes there is dividends
but must hold until how long
to break even?

 

[DevilPlate]

must also factor in
REITs can do dilution
from private placement
or right issues
give you divided
but take back money later

Many mistaken REITs as bonds
bonds gives coupon
and at least goes back to par value
after maturity

for REITs
yes there is dividends
but must hold until how long
to break even?

Closest comparison is Sreits vs buying physical commercial property

 

[homer123]

Reits constantly pay out dividend every quarter, that $1 of dividend that was received 5yrs back is worth at least $1.1-$1.2 now. Have to factor in the fact that dividend investors can immediately reinvest the returns over the last 4-5yrs and gotten doubt the returns now - that is returns upon dividend returns

Dividend received from sreits in 5 years average 5.5% and DPUs have been decreasing.. With a capital loss of >27% in 5 years, you get almost 0% return.. Might well put in CPF or SSB!!

 

[homer123]

Right from the start REITs are not meant for capital growth one leh. He's tagging the wrong function to the asset, then when the asset underperform, people complain non-stop despite it being their own mistake. REITS have to pay out dividends, plus good reits the DPU increases year on year.

Spore properties have been going up sharply in the last 5 years and reits cannot even produce 1 % capital growth ..to make it worse almost all sreits are showing decreasing DPU in the rate of 5-10% annually in the last 5 years.

 

[limster]

even though this is a REIT thread, I'm going to say that we should be very careful about betting against MSCI World. As prices fall, buy some REIT, buy some MSCI world, don't all-in REITS.

I did another round of DCA of Capitaland Ascott, VWRD, and LSPU today.

Spore properties have been going up sharply in the last 5 years and reits cannot even produce 1 % capital growth ..to make it worse almost all sreits are showing decreasing DPU in the rate of 5-10% annually in the last 5 years.

Like I said previously, be careful about betting against MSCI World! I feel its ok to buy REITs with good fundamentals (and good management) but make sure you have some MSCI World as well

 

[mooseolly]

Reits is going down more liao with only 2 rate cuts projected in 2025. But I think since it is so low already cannot go down until yield become more than 8%.

 

[TehSi99]

Reits is going down more liao with only 2 rate cuts projected in 2025. But I think since it is so low already cannot go down until yield become more than 8%.

Nothing is certain. Too much speculations on interest rates movements make reits volatile.

 

[Tiny Shrimp]

yield will go down
when they cut dividend payout to conserve cash....

 

[DevilPlate]

yield will go down
when they cut dividend payout to conserve cash....

Mandatory to payout 90%

Sreits != local banks

 

[stanlawj]

DOGE is working.
Growth in supply of UST bonds will trend lower, while demand for high-yield UST bonds will remain strong leading to ....long bond YIELDS FALLING!! This is my 2025 prediction.

SREITS to the moon!



Video explanation:

 

[DevilPlate]

Aiya….the day when i realized a Master recommending Sreits……i know gua gua gua liao

I console myself that prices stay depressed then i cannot sell and guai guai collect dividends.
If prices go up 20%, i will be tempted to sell and duno where to collect passive income liao

 

[JustDoLor]

Fed Interest Rate vs S-REITs ETF.


Looking at Fed Interest rate projections in the long term….. beyond 2027 at 3% …… Does S-RIETs still got chance to crawl back and recover to previous glory?


——————————
Where all the money flowed to? To the 3 banks?


——————————
Just checked some charts, some RIETs their charts seem not so ugly, moving sideways. Not bad ah?

Now compare them to the RIETs ETF. How ah?

 

[stanlawj]

Dividend received from sreits in 5 years average 5.5% and DPUs have been decreasing.. With a capital loss of >27% in 5 years, you get almost 0% return.. Might well put in CPF or SSB!!

You cannot use the last 5 years to judge returns because of the stock-bond crash from 2022-2023.

 

[ctan84]

Like I said previously, be careful about betting against MSCI World! I feel its ok to buy REITs with good fundamentals (and good management) but make sure you have some MSCI World as well

Got average down FLCT ? Think hit your next target price liao. I thinking whether to average down more or not.

 

[limster]

Got average down FLCT ? Think hit your next target price liao. I thinking whether to average down more or not.

FLCT price looks good now, I would have bought except that I used up my spare cash to buy US stocks.

FLCT price moves so slowly I think no rush, next week will still be about the same price.

 

[fr33d0m]

If long term interest rate is 3%, S-REITs are toasted. Before all these, QE drove short rate near to 0, long rate below 2%, you know. S-REITs can only boom if UST 10y goes below 2%

 

[DevilPlate]

If long term interest rate is 3%, S-REITs are toasted. Before all these, QE drove short rate near to 0, long rate below 2%, you know. S-REITs can only boom if UST 10y goes below 2%

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%?

 

[sky1978]

Looking at Fed Interest rate projections in the long term….. beyond 2027 at 3% …… Does S-RIETs still got chance to crawl back and recover to previous glory?

The previous glory days were under a low/zero rate environment + money printing, so, broadly speaking, it will take another recession or some crisis for that to happen.

If we take some big REITs and compare their current interest expense vs 2021/22, the additional cost already hit their DPU by 10% to 20%. Their lowest yield during their glory days can be 4.5% vs 6% now. A 10c DPU at 6% will trade around 166c, if the DPU increases to 12c (when the environment mirrored 2021/22) and the market yield drops to 4.5%, the price becomes 266c. I am only pointing out what needs to happen rather than discussing whether those conditions will reappear again. Otherwise, if the next 10 years are free of recession but DPU manages to up 20% cumulatively by the end of the 10th year and the market continues demanding a 6% yield, the price will only move to 200c.

Another important factor to consider is, that many S-REITs have market exposure beyond Singapore. DPU can be wiped down by FX movement (e.g. CNY, JPY, AUD). Different asset classes (retail, office, logistics) in different countries can perform differently. In some regions like Europe, the political environment is another factor to think about. Most of these overseas assets (as long as the rates there are not super high, IDR/INR), will be substantially funded using the local debt (natural balance sheet hedge), so rather than USD or SGD interest rates, the relevant rates that affect their performance will be the EUR, GBP, AUD, CNY and JPY interest rate.