What is the best REIT out there and why? - Seedly

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Asked by James Yeo

Updated 3w ago

What is the best REIT out there and why?

I want to see what parameters people use to evaluate reits

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Tan Wei Ming
Tan Wei Ming,
Level 5. Genius
Updated 3w ago

The REIT that I always want to buy will be Mapletree Commercial Trust. MCT owns Vivocity which is the largest shopping mall in Singapore.

For parameters, I usually look at P/B ratio, dividend yield, quality of the assets such as occupancy rate, WALE etc.

For P/B ratio, I am comfortable in buying any quality REIT that is 1.10 and below. Dividend yield for me must be mlre than 5%. Occupancy rate must be high and stable over the years and WALE must be long too. However, not all REITS have long WALE as it depends on the industry the REIT is in.

Other than that, I will also look at the historical distribution, I prefer REITS to give higher or stable distribution every year.

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Kenneth Lou
Kenneth Lou

3w ago

Solid answer :D
Kenneth Lou
Kenneth Lou, Co-founder at Seedly
Level 8. Wizard
Updated 3w ago

CMT! CapitaMall Trust!

  • Oldest REIT
  • Strong and sustainable DPU
  • Strong management with proven track record in acquiring malls and doing AEI
  • Growing spending power of Singaporeans in malls in SG

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John Ong Zhenxi
John Ong Zhenxi

3w ago

Wei Ming gave a comprehensive answer. One thing I will check is also who owns the REIT.
Kenneth Lou
Kenneth Lou

3w ago

Yeah good pointers!
Siow Nan Wong
Siow Nan Wong,
Level 5. Genius
Answered 3w ago

Low debt, growing yet sustainable dps, prudent management with good track record

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Gavin Tan
Gavin Tan,
Level 3. Wonderkid
Answered 3w ago
  1. P/B ratio is a good parameter but it isn't the most imporant, it is more of a guideline as to when the value of the share is over or under it's book value
  2. Gearing, or Total Debt divided by Total Asset, tells you how much the REIT can borrow! Singapore's max gearing a REIT can go to is 45%, so numbers < 40%, are considered pretty fine, but an ideal range would be, from 25%-38%.
  3. Other things I keep in mind would be dividend yield if you buy the stock at the current price, and also consistent dividend growth!

A few REITs I would recommend right now would be Ascendas REIT and MIT/MCT.

-For A.REIT, when it falls around the 2.93 region, though it is at around a 1.3 PB ratio, I feel like it's still a valuable REIT to hold onto !

-For MIT and MCT, just consistent growth throughout, but try to enter at a good price !

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