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REITS and property stocks in Singapore
20 Apr 2021 (352 views)

I present my analysis of REITS and property stocks in Singapore.

What is the difference between REITS and property stocks?

This is explained in this article
https://blog.moneysmart.sg/invest/singapore-reits-investing/

In the case of REITS, you are a part owner of the properties comprised in the REITS. After paying the fee to the manager of the REITS, the net income are distributed to the REIT holders.

For a property stock, you are a part owner of the business of the company which is involved in the development and investment of properties. The company will declare a part of its net earnings as dividend and retain the remainder for its future business growth.

I present my analysis of the large REITS and property stocks in Singapore. I show REITS separately from the property stocks. In each chart, I present the stocks in descending order of the dividend yield.

Normally, I will pay attention to the price earning ratio (PE ratio). In this case, I found that several stocks have negative earnings, due mainly to revaluation of assets. I would prefer to look at the regular earnings, i.e. excluding adjustment due to asset revaluation, but this information is not readily available.

I also pay attention to the price to book value (price/BV). If this exceeds 1.0, the stock price is at a premium (i.e higher) than the asset value. If this is lower than 1.0, the stock price is at a discount to the asset value.

My preference is to invest in REITS/ propety stocks with a dividend yield higher than 3% and a price/BV lower than 1.0.

Using the above criteria, my preference is to invest in Suntec REIT, Keppel REIT, Far East Orchard, Hongkong Land and Guoco Land.

My top preference is Hongkong Land due to its large discount to book value. I am less keen on Far East Orchard due to its relatively small market capitalization. (Disclosure: I have a large investment in Hongkong Land and in Capitaland).

I avoid REITS that have a price that is considerably higher than the book value.

Note - I am giving my personal view on this matter. I am not recommending any buy or sell of any stock at any specific price.

Tan Kin Lian


REITS and property stocks in Singapore
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I present my analysis of REITS and property stocks in Singapore.

What is the difference between REITS and property stocks?

This is explained in this article
https://blog.moneysmart.sg/invest/singapore-reits-investing/

In the case of REITS, you are a part owner of the properties comprised in the REITS. After paying the fee to the manager of the REITS, the net income are distributed to the REIT holders.

For a property stock, you are a part owner of the business of the company which is involved in the development and investment of properties. The company will declare a part of its net earnings as dividend and retain the remainder for its future business growth.

I present my analysis of the large REITS and property stocks in Singapore. I show REITS separately from the property stocks. In each chart, I present the stocks in descending order of the dividend yield.

Normally, I will pay attention to the price earning ratio (PE ratio). In this case, I found that several stocks have negative earnings, due mainly to revaluation of assets. I would prefer to look at the regular earnings, i.e. excluding adjustment due to asset revaluation, but this information is not readily available.

I also pay attention to the price to book value (price/BV). If this exceeds 1.0, the stock price is at a premium (i.e higher) than the asset value. If this is lower than 1.0, the stock price is at a discount to the asset value.

My preference is to invest in REITS/ propety stocks with a dividend yield higher than 3% and a price/BV lower than 1.0.

Using the above criteria, my preference is to invest in Suntec REIT, Keppel REIT, Far East Orchard, Hongkong Land and Guoco Land.

My top preference is Hongkong Land due to its large discount to book value. I am less keen on Far East Orchard due to its relatively small market capitalization. (Disclosure: I have a large investment in Hongkong Land and in Capitaland).

I avoid REITS that have a price that is considerably higher than the book value.

Note - I am giving my personal view on this matter. I am not recommending any buy or sell of any stock at any specific price.

Tan Kin Lian