How do you analyse REITs?

I look at stability of dividend distributions, any growth in dividend and or stock price, quality of sponsor, any adverse fx risk or funky management decisions, amount of debt, and price to nav.

For US reits, do note that there will be 30% withholding tax on dividends received so you have to factor for this. The dividend yield isn't as good as the reits listed here as well from what I observe so far.

Hey there!

To analyse REITs, there are a few metrics you can look at. Generally speaking, some of the important ones I look at are Increasing Net Property Income (or as we call it, revenue) & Distribution Per Unit (DPU) every year, Low Gearing Ratio (how much debt headroom they have), Occupancy Rate (are their buildings fully occupied), and growth prospects.

Seedly just released an article on Capitaland Mall Trust (thanks Sudhan!!) which I find it very insightful, do take a look at it (hint: it's one of the better REITs out there)!

https://blog.seedly.sg/capitaland-mall-trust-sg...

I analyse REITs on the basis of how well they are able to churn revenue out of their properties and evaluating on the future attractiveness/prospect of their property.

This is because revenue for REITs trickles them into cash quickly and affects significantly the distribution to unitholders as dividends

Hi anon, timely question as we had just released a post on picking quality Singapore REITs.

Some of the factors I look at are:

• Growth in Gross Revenue and Net Property Income
• Growth in Distribution Per Unit
• Property Yield of Between 5% and 9%
• Gearing Ratio of Below 40%
• Interest Coverage Ratio of Above 5x
• Healthy Portfolio Occupancy Rate
• Positive Rental Reversions
• Presence of Growth Prospects
• Acceptable Price-To-Book Ratio
• Distribution Yield of Above 5%

You can find out more about why I chose each factor here: https://blog.seedly.sg/how-to-pick-the-best-sin...

There are some REIT asset classes in the US that are not listed in Singapore. One prominent one is American Tower, which owns cell towers. You can check it out if you are keen.