I think that SG REITs are more or less at fair value, so investors should expect the dividend yield to be the main source of returns, with limited capital gains.
In my mind, investors buy REITs for two reasons and these factors may determine if REITs are still attractive:
1) dividend yield
2) the underlying investment property values (book value)
#1: the dividend yield for SREITs sector is on the low end of its historical range. However, to make a fairer comparison, many investors look at the dividend yield in excess of 10-year Singapore Govt Bond yields, which at 4.1% now is in line with historical averages.
#2: investors typically look at the price-to-book ratio as an indication of whether the SREIT sector is cheap or expensive. Right now, the sector trades at 1.1x P/B, slightly above the 1.0x historical average.
SGX publishes a monthly SREIT chartbook that I find quite useful. The data that I mentioned may be found on Page 8 of the January 2021 chartbook:
https://www.sgx.com/research-education/sectors
I think that SG REITs are more or less at fair value, so investors should expect the dividend yield to be the main source of returns, with limited capital gains.
In my mind, investors buy REITs for two reasons and these factors may determine if REITs are still attractive:
1) dividend yield
2) the underlying investment property values (book value)
#1: the dividend yield for SREITs sector is on the low end of its historical range. However, to make a fairer comparison, many investors look at the dividend yield in excess of 10-year Singapore Govt Bond yields, which at 4.1% now is in line with historical averages.
#2: investors typically look at the price-to-book ratio as an indication of whether the SREIT sector is cheap or expensive. Right now, the sector trades at 1.1x P/B, slightly above the 1.0x historical average.
SGX publishes a monthly SREIT chartbook that I find quite useful. The data that I mentioned may be found on Page 8 of the January 2021 chartbook:
https://www.sgx.com/research-education/sectors