An Overview of REITs in light of the Singapore Financial Market

| July 1, 2013 | 0 Comments

singapore reit investment One of the best ways to ensure a comfortable life after retirement is to invest in financial products whose value appreciates consistently over time. Investing in property and allowing it to appreciate over time is a good strategy. However, considering the difficulty of investing into real estate markets throughout the world, a much better alternative is to invest in Real Estate Investment Trust or REIT products.

An REIT product is a security that can be found on all of the major exchanges throughout the world. The REITs are directly invested into properties as well as mortgages. But what does that mean for a potential investor? First of all, an REIT provides investors with a considerably liquid method of investing real estate. Unlike an actual tangible property or piece of real estate, a REIT can easily be sold on any security exchange market. Therefore, it is perfect for folks who want to reap the benefits of investing real estate but also do not want to have their investment tied down in case they have to liquidate.

Moreover, Real Estate Investment Trusts are subject to special tax considerations and will generally offer investors a higher yield than if you were to invest into the real estate market directly. If you’re convinced that this just might be the perfect financial product for you, here’s what you need to know to get started.

Within the Singapore Market, there are 27 REITs and Business Trusts that are open for investment, at this point of writing. On an average, the annual yield that an investor should be able to receive lies between a range of 4% and 9%.

In regards to the Singapore Real Estate Investment Trust Market, you can find REITs issued by CapitalCommercial Trust and CapitalMalls Trust that provide lower yields. These two groups have a varied portfolio of assets that include properties like Plaza Singapura, IMM as well as Bugis Junction. In comparison, REITs such as AIMS and Cambridge Industrial Trust provide higher yields, though investors are exposed to higher risk. As a general rule, investors should be aware of the fact that office and retail properties provide lower yields as compared to industrial real estate. On the other hand, office spaces and similar types of real estate have more stable income generating streams as compared to industrial properties.

Category: REITs

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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