Why S-Reits still attract so many investors?

When pandemic hits, global financial markets including S-REITs initially crashed, with investors panicking and selling liquid financial assets. For investors daring and savvy enough to put money to work during the trough in end-March 2020, total returns from capital gains have been a whopping 57%.

Despite headlines on troubles in the retail space and how work-from-home has made offices redundant, occupancies measured by leases have remained high for S-REITs holding shopping malls and offices in Singapore, with little problems in rental collection, even if fewer are using these spaces.

In the hardest hit hotel sector, the fall in physical property asset value was contained to less than 10% at a portfolio level among the S-REITs, a good outcome despite the pandemic curbing travel.

Why S-Reits still attract so many investors?

1. Profits to be distributed - S-REITs are a good source of income. Qualifying S-REITs are encouraged to pay gains to unitholders instead of hoarding profits as they not taxed on dividends distributed to unitholders. Though it dropped 6.3 per cent in 2020, analysts expect a rebound to S$135.6 this year.
2. Its bite size for the big market - Until S-REITs were launched in July 2002, the commercial property market was inaccessible to most individual retail investors, with ticket sizes of each standalone commercial property in the millions and billions of dollars.
3. Stable income - Few investment opportunities provide such stability for 4 to 7 per cent dividend yield per year. It’s little wonder such investment classes with a dividend income and the potential for capital gains appeal to investors with a neutral risk profile at Singapore’s median age of 42.
4. Conducive growth environment - Singapore has maintained an encouraging ecosystem for the development of S-REITs.

The big question - Will gain in S-Reits continue as interest rates rise?

In the coming webinar, we will study into the current inflation scene that is happening around the world, will it ultimately cool off or continue to surge?

We will also discuss the variables that will trigger Fed to hike interest rates and the subsequent hikes. The risk and opportunity of the subsequent hikes between U.S., China and Singapore markets.

Though it is recorded, the principles behind are timeless, the discussion made are unfolding along the timeline.

Click here for registration.

Source: https://www.facebook.com/203475543032854/posts/4721201531260210/?sfnsn=mo