Let's talk REITs......

[bangmai]

I see people buying properties that gross 6%...their net is likely closer to 3%. Many REITs do a lot better than that. I like AHH, FPO, and GTY. I don't like mortgage REITs. Any other REIT traders out there? Are there any SET listed REITs?

[AyG]

Are there any SET listed REITs?

Yes, there are 56 of them, from AMATAR to WHART.

[cigar7]

I have several Canadian based REITs yielding in the 5-10% per annum, paid monthly.

[bangmai]

"O" is a well known REIT in the US, that also pays monthly...yielding 4.82%. The monthly aspect has made them very popular. I hold DIV and PFF, which aren't REITs, but pay monthly. Which Thai REITs pay a good dividend?

[wordchild]

Singapore has a well developed reit sector. Probably a better place to look for Asian reits than Thailand ie better regulation, better corporate governance, better asset spread, etc etc.

There are a number of quite well diversified reits listed in Singapore from which you can gain exposure to different asset classes in the region. eg (and not recommendations); Capitaland Commercial trust (mainly Singapore offices,yield 6.5%), Starhill Global (retail and office Singapore and Aus, yield 6.8%); CapitaLand China Retail (midsize malls in PRC; yield 7.3%); Ascendas (industrial parks Singapore and Australia yield 6.8%; Ascot (sevice apartments Asia/Europe yield 6.4%)

Edited November 9, 2015 by wordchild

[wordchild]

As with any investments due diligence is required and Reit investors need to look closely at whats under the hood and not just focus on the often attractive dividend yield, the key issue is dividend sustainability and the potential (if any) for growth.

In no particular order one to needs to look at; 1)The underlying assets; diversification of exposure, what/where, tenant mix, lease lengths etc

2)balance sheet , debt levels, structure and maturity , This is particularly important if we are to enter a period of rising rates.

3)management delivery eg dividend and acquisition record

4)corporate governance issues; independence of the board, links/potential conflicts of interest with the original sponsor.

I am sure there are others but those are the main ones I can think of now.

For me, the main issues with the Thai reits I have looked at are the underlying asset quality eg a lack of diversification tenant or geography and also corporate governance issues.

Edited November 9, 2015 by wordchild

[AyG]

I looked at the historical dividend yields of four a few days ago. They were as follows:

CPN Retail Growth Leasehold Pr Ord (CPNRF) 5.13%
IMPACT GROWTH REAL ESTATE IT (IMPACT) 5.17%
Tesco Lotus Ret Growth F&L Prp Ord (TLGF) 6.33%
TRUE Telecommunications Grwth Infra F... (DIF) 7.52%

[gk10002000]

I am in the USA and hold about $45 K worth of NLY at the moment. The last few years most REITs share prices pretty much went downward so from a paper value point of view, they haven't looked good as a portfolio value holding. Even the dividends have gone down in general. I just got the quarterly dividend and have been automatically reinvesting it back into NLY. I don't plan to add any more fresh money to it. The divvie is over 10 %. I plan to hold it and not panic sell out. It is in my Roth IRA account so the dividends are tax free.

[bangmai]

NLY is a mortgage reit, with an unsustainable dividend, and even more interest rate sensitive than the other types. MTGE same shiite.

[gk10002000]

NLY is a mortgage reit, with an unsustainable dividend, and even more interest rate sensitive than the other types. MTGE same shiite.

Well, in a few more years or so I will have collected enough dividends that add up to my total initial investment. NLY has been around for a long time, so I disagree with your statement that the dividend is unsustainable. It might go down a bit but that is OK. If you don't like MTG based REITs, I understand that. If you only want property REITs, then you won't be getting large returns on your investment, and the dividends do not qualify as "qualified" dividends and the 15% tax rate. There are several stocks that pay similar 5% rates (ATT for example) and their dividends are "qualified". If you like property, fine go with property REITs. If you want dividends, there are stocks that pay equivalent yields. There are bonds and bond funds and ETFs also that pay equivalent yields but in general they won't be "qualified" for lower tax rates either.

[bangmai]

through June 30..they earned 4 cents per share for the previous year.....and paid out 1.20....P/E 261. Your point is correct about qualified dividends, but the Mortgage REITs are at a tax disadvantage to the property REITs because they can't take advantage of depreciation, which can eliminate tax liabilities for the property REITS. There is a pretty long list of mortgage REITs with double digit dividend...most are down about double their dividend in the last 12 months.

[fletchsmile]

Thai REITs I find them too time consuming to research and not always easy to see transparent info as to what's going on and the underlyings, plus difficult to get quality info, so avoid individual Thai REITs.

I hold quite a few Singapore REITs. As mentioned by Wordchild, there's some decent investments there if you put the effort in. eg I hold ACT, FCT, FCOT as key holdings. Yields are a bit lower than Thailand, but more than compensated for in my view by better transparency, more available info, better regulated etc. Singapore also has something of a natural fit for property an I like SGD as a currency based in Thailand, correlates better with THB than USD so less currency risk for me.

So Singapore + SGD + property + decent yield + tax free = a story I like.

TMBAM run an interesting property income fund which I also hold. It's approx 50% invested in Thai REITs and 50% in Singapore REITs. Saves me picking individual Thai stocks and I also know and hold several of the Singaporean ones directly, so gives me confidence they have the right procedures and approach in selecting investments.

US REITs I'm not really a fan of for tax reasons and also the added currency risk for someone living in Thailand, plus admin hassle. They can make a lot of sense for income investors in the US. But for non-US investors they can become either an admin hassle for tax or inefficient from a tax perspective. eg without a W8BEN + a broker that will apply DTAs on your behalf you suffer 30% WHT. My broker in Singapore used to apply the DTA to Thai and UK residents before so I could pay only 15%, but no longer does. Given that REITs are obliged to pay out most of their returns as income, suffering a large WHT tax on that for US investments is inefficient for me. I'd rather it didn't pay any income from that perspective as capital gains are free. So on say a 6% yield I'd lose 1.8% and receive only 4.2% this compounds over time. By comparison a 6% yield on a Singapore REIT is virtually tax free for me, and with less volatility between SGD/THB than USD/THB

Cheers

Fletch

[Lukecan]

Check EKGYO, its a Turkish REIT. A huge one. I think its one of the better places to invest right now as its at its 5 year low. The yield isnt that great, but there is huge room for growth. The yield is around %3. The reason why the yield is low is because it only distributes like 40% of the profits, and reinvests the rest into more construction. In the long term horizon you could be looking at a decent cash cow.

Edited November 22, 2015 by Lukecan

[AyG]

Check EKGYO, its a Turkish REIT. A huge one. I think its one of the better places to invest right now as its at its 5 year low.

Do check your facts. It's nowhere near a 5 year low. It's currently around 3.0. In June this year it was at a low of 2.38. In January 2012 it was at a low of 1.88.

See http://www.bloomberg.com/quote/EKGYO:TI

[Lukecan]

Check EKGYO, its a Turkish REIT. A huge one. I think its one of the better places to invest right now as its at its 5 year low.

Do check your facts. It's nowhere near a 5 year low. It's currently around 3.0. In June this year it was at a low of 2.38. In January 2012 it was at a low of 1.88.

See http://www.bloomberg.com/quote/EKGYO:TI

In US dollar terms its very near its 5 year low. Currently 1 usd = 2.83 liras. In 2012 1 usd was 1.5-1.60 liras.

[GroveHillWanderer]

I have not done any previous investing, how would I go about finding a broker in Singapore? Or does anyone have any recommendations?

[wordchild]

to invest in Singapore (if that's what you want to do) you don't need to use a broker in Singapore you just need a broker who has access to that market they can be based anywhere (incl Thailand). Having said that, there has been positive comment on this forum on Saxo who have an office in Singapore and who seem to be very open to taking on Thai based expats as clients.