How To Choose Which REIT To Invest In?

| September 1, 2011 | 0 Comments

best singapore reit investments1) High Dividend Yield

Having a REIT that gives out more than a 5% annual dividend yield assures you of a good return.

2) Historically Strong AFFO and Dividend Growth

A REIT that has a strong track record of growing their AFFO and dividends for the past 5-10 years will ensure that you can get both higher dividend payouts and capital appreciation from the REIT’s price.

3) High Expected FFO and Dividend Growth

Besides a good track record, a REIT also needs to have a good projected growth. This is primarily determined by the quality of properties in the REIT’s portfolio, and the acquisition plans of future properties. Sometimes it is even prudent to actually visit the properties and see if they are popular places with high-quality tenants.

4) Low Gearing Ratio

Generally, the lower the gearing ratio, the better. Discard all REITs that have a gearing ratio of more than 50%.

5) Valuation of REIT’s Stock Price

A simple way to valuate a REIT is to see how its current stock price stands against its NAV. If the stock price is less than its NAV, then the REIT is undervalued, and vice versa.

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Category: Learn to Invest & Trade

About the Author ()

John Tan has been Vice President of BlueTrust Investments Corporation for 6 years since the mid-90’s. He has since moved on, to be a professional full-time trader.

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