How Secure Are REITs?
The buzzword in property investing these days are REITs.
For those not fully aware of what they are, we will be doing an in-depth study of these type of equity. But for now, many markey experts and watchers seem very optimistic, given the healthy property outlook Malaysia is experiencing.
Star reported that the projected dividend returns are expected to be between 6-8% in this article. Basically they are basing the estimate on the performance of similar REITs in other countries. At that rate, it can be said that the projected returns are not phenomenal, but at least it is better than fixed deposits (FDs) or not doing anything with your money. What about bond funds? Some people say they return more than 10%, but how many people actually invest in them?
But on that same note, Star also cautioned that REITs need a larger market capitalization to make a significant impact in the market.
But for every buyer out there, an in-depth study of each REIT need to be done. Forecasts are just forecasts, actual performances and tangible returns are a whole different story.
Having said that, there is still only one REIT launched so far, Axis-REIT. It did well during launch, being oversubscribed 18.36 times for institutional offering, and 3.72 times for the public issue.
Let’s see a few more REITs first, please.
Actually not many people know what REIT is and how it work?
Agreed. Yield rate is US is around 10% while in Malaysia is only 5%
Comment by Siput — July 20, 2005 @ 6:13 am
true, many people are still not aware of this product and how it works. we will explore REITs further in the near future, but i think more is better in this case.
As always, forecasts sometimes can easily sway the general public…
Comment by Administrator — July 20, 2005 @ 6:31 am
REIT, yet another tools for financial institute to earn “service charge” and bloat the properties market artificially.
After the ringgit depeg, properties might rise because of hot money. So don’t blink your eye if REIT is the next most speculated tools besides stock and unit trusts.
Comment by moo_t — July 25, 2005 @ 6:28 am
quite true, moo_t. they usually don’t publicize the ‘charge’, only telling you about the great returns. but let’s see more REITs here first.
Comment by Administrator — July 25, 2005 @ 6:30 am