I have ranked the REITs and Property Business Trusts listed in Singapore by 3 criteria.
- Price/Net Asset Value
- Dividend Yield
- Debt-to-Equity Ratio
The results are documented here:
How to use the sheet?
The sheet serves as a guide to help you to find value-for-money REITs. It is not a recommendation to buy the top 10 REITs in this list. The top 10 REITs are those which ranked well in all three criteria mentioned above. You can take another step to review if the individual REIT fits your investment needs. Is the Price/NAV below 1? Or even lower? Is the dividend yield acceptable to you? How about the leverage? Is it too high for your comfort?
I hope the ranking can help you focus on the right REITs. You are a busy person and I know that. Instead of looking through all the REITs, you can save time by examining the top 10 or even just the top 3.
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My View on REITs
REITs have tumbled down in price after the Fed talked about stopping QE3. Many feared the interest rates would go up and leveraged companies like REITs will be affected the most. I do not want to predict the future and I do not know when the Fed will pull the plug, or even if they will. Focusing on the valuations now, the REIT sector has an average Price/NAV of 1. This means that REITs are fairly valued. Secondly, dividend yield is about 5.74% which is decent but not impressive. Thirdly, the debt-to-equity ratio averaged 63%, which is on the high side but not at risky levels.
I believe there is room for the REITs to go up in price but personally, I will not participate at these prices since there isn’t any clear discounts.