Building Wealth Through REITS (Third Edition) , livre ebook

Marshall Cavendish International - Bobby Jayaraman

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133 pages

English

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Almost two decades have passed since the launch of Singapore's first REIT (Real Estate Investment Trust) in 2002. Despite that, REITs are not as popular as they deserve to be. Singapore REITs are one of the few businesses that offer a direct play on the domestic economy, and they have proven their resilience through market cycles. Building Wealth Through REITs takes a deep look at this asset class and explains why every investor should take a serious look at REITs. It discusses common perceptions about REITs and why many of them don't hold up to scrutiny. In-depth interviews with the CEOs of 8 major S-REITs (including Parkway Life and Frasers Logistics & Commercial Trust) will stimulate your thinking and further your knowledge of various REITs. This third edition of the book provides a timely analysis of REITs in the age of Covid, with advice on how investors can continue to thrive in trying times. With practical guidance on how to build a strong and high-performing REIT portfolio, you will be on your way to financial freedom much earlier than you thought possible.

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Personal finance

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Publié par	Marshall Cavendish International
Date de parution	04 juin 2021
Nombre de lectures	0
EAN13	9789814974356
Langue	English

Informations légales : prix de location à la page 0,0550€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

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My first REIT investment was way back in 2002 when I bought Ascendas REIT. How I wish this book had been available at that time. I would have made fewer mistakes and more profits!
- M OHAMED S ALLEH M ARICAN
Founder and CEO, Second Chance Properties Ltd
Building Wealth Through REITs is a great contribution to the nascent REIT market in Asia. We believe REITs are a perfect investment vehicle for Asian investors, yet to date the popularity and investor enthusiasm in Asia for REITs is still lacking. This comes down to various misperceptions that Bobby sets out to debunk with this ground-breaking book.
- R AYMOND W ONG
Executive Director, Saizen REIT

2021 Marshall Cavendish International (Asia) Private Limited
First published in 2012
This third edition published in 2021 by Marshall Cavendish Business An imprint of Marshall Cavendish International

All rights reserved
No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. Requests for permission should be addressed to the Publisher, Marshall Cavendish International (Asia) Private Limited, 1 New Industrial Road, Singapore 536196.
Tel: (65) 6213 9300 E-mail: genref@sg.marshallcavendish.com
Website: www.marshallcavendish.com/genref
The publisher makes no representation or warranties with respect to the contents of this book, and specifically disclaims any implied warranties or merchantability or fitness for any particular purpose, and shall in no event be liable for any loss of profit or any other commercial damage, including but not limited to special, incidental, consequential, or other damages.
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Marshall Cavendish Corporation, 800 Westchester Ave, Suite N-641, Rye Brook, NY 10573, USA Marshall Cavendish International (Thailand) Co Ltd, 253 Asoke, 16th Floor, Sukhumvit 21 Road, Klongtoey Nua, Wattana, Bangkok 10110, Thailand Marshall Cavendish (Malaysia) Sdn Bhd, Times Subang, Lot 46, Subang Hi-Tech Industrial Park, Batu Tiga, 40000 Shah Alam, Selangor Darul Ehsan, Malaysia
Marshall Cavendish is a registered trademark of Times Publishing Limited
National Library Board, Singapore Cataloguing-in-Publication Data
Names: Jayaraman, Bobby.
Title: Building wealth through REITS / Bobby Jayaraman.
Description: Third edition. | Singapore : Marshall Cavendish Business, 2021 |
First published: 2012.
Identifiers: OCN 1245252264 | e-ISBN: 978 981 4974 35 6
Subjects: LCSH: Real estate investment trusts.
Classification: DDC 332.63247--dc23
Printed in Singapore
To my son Mark - Hope this sparks your interest in investing
CONTENTS
Acknowledgements
Preface to the Third Edition
Introduction
CHAPTER 1
An Overview of REITs
What is a REIT?
Singapore REIT regulations
The structure of a REIT
How is a REIT managed?
How do REITs grow?
Singapore REITs cycles
CHAPTER 2
REITs versus Other Yield Investments
Property
High dividend stocks
Bonds
Perpetual securities
Business trusts
CHAPTER 3
Perception versus Reality
Seven common misperceptions
CHAPTER 4
Different Types of REITs
Retail REITs
Hospitality REITs
Office REITs
Health care REITs
Industrial REITs
Cross-border REITs
CHAPTER 5
The Health of a REIT
How to read the financial statements
Balance sheet and financing strategy
Future performance
CHAPTER 6
How Much Is a REIT Worth?
Valuing REITs
Value of management
CHAPTER 7
Building a Strong REIT Portfolio
What to look for in a good REIT
Risks and challenges
The best days are ahead
CHAPTER 8
REITs in a Volatile Interest Rate Environment
Long-term and short-term interest rates
REIT valuations and bond yields
Choosing interest rate proof REITs
Conclusion
CHAPTER 9
REITs in a Post-Covid World
Retail REITs
Office REITs
Hospitality REITs
Logistics REITs
Summary
Interviews with S-REITs CEOs
CapitaCommercial Trust
CDL Hospitality Trusts
First REIT
Lippo Malls Indonesia Retail Trust
Saizen REIT
CapitaMall Trust
Parkway Life REIT
Frasers Logistics Commercial Trust
APPENDIX
Spotting dubious REITs/business trusts
Glossary
ACKNOWLEDGEMENTS
I have always been interested in investing and sharing my thoughts about investments from the perspective of a practising investor. My first articles on REITs were published in Pulses , a finance magazine (now defunct), and Singapore s The Business Times newspaper in 2010. I wish to thank Ms Teh Hooi Ling for giving me that opportunity. It was the positive feedback from many investors on the articles that inspired me to write this book.
I wish to express my appreciation to the management of several REITs who not only took time from their busy schedules to have in-depth discussions with me on REITs for this book but who have always been very co-operative in openly discussing the many aspects of REITs whenever I had questions. They have been instrumental to me in deepening my understanding of how REITs really work.
Special thanks to Simon Ho and Jeanette Pang from Capita-Mall Trust; Dr Ronnie Tan, Victor Tan, Jacky Chan and Hao Wee Lee from First REIT; Ho Siang Twang and Vincent Yeo from CDL Hospitality Trusts; Lynette Leong and Ho Mei Peng from CapitaCommercial Trust; Dr Chew Tuan Chiong and Chen Fung Leng from Frasers Centrepoint Trust; Raymond Wong, Arnold Ip, Chang Sean Pey and Joey Goh from Saizen REIT; and Viven Sitiabudi and Alvin Cheng from LMIR Trust.
I am grateful to Mr Mohammed Salleh, founder and CEO of Second Chance Properties, for his feedback on the book and for sharing with me his philosophy and insights into property investing and business in general. I have learned to appreciate the many details of running a retail business and the impact on retail REITs through these conversations.
Many thanks to my fellow investment enthusiasts - too numerous to mention, regrettably - with whom I have frequently exchanged ideas and who have encouraged me to write this book and provided valuable feedback.
Thanks to Lee Mei Lin from Marshall Cavendish, the publishers of this book, and Violet Phoon for her patience in editing it.
Finally, allow me to express my gratitude to my wife Elena and son Mark who put up with regular late nights as I tackled the volatile markets and wrote the book.
PREFACE TO THE THIRD EDITION
A lot has changed since the first edition of this book was published in 2012. REITs are now immensely popular with all types of investors. The sector has seen a constant flow of IPOs over the past few years; a few REITs have merged while some are pale shadows of themselves.
Retail investors have become much more knowledgeable about REITs and activist investors are starting to make their presence felt in the Singapore REIT world - for the first time ever a merger between two REITs (Sabana REIT and ESR REIT) was blocked by an activist fund.
While REITs have their up and down cycles, interest rates fluctuate and REIT sectors go in and out of fashion, the fundamentals of evaluating REITs remain intact. Thus, it is no surprise that this book has undergone several reprints and continues to remain popular.
This edition includes two new interviews with the management of Parkway REIT and Frasers Logistics Commercial Trust. A chapter on the impact of the Covid-19 pandemic on REITs has been added, and outdated material has been revised and updated with new data.
Most of the material from the first edition, however, continues to remain relevant. Examples that use data from earlier years to illustrate a particular aspect of a REIT (e.g., understanding financial statements or how REITs behave in volatile interest rate environment) have been left unchanged.
As with the first edition, the intention is to make REITs accessible to all.
Happy reading!
B OBBY J AYARAMAN
May 2021
INTRODUCTION

The fact that other people agree or disagree with you makes you neither right nor wrong. You will be right if your facts and reasoning are correct.
- B ENJAMIN G RAHAM
Real estate investment trusts (REITs) allow you to become part owner of some of the best commercial properties in Singapore and other countries, and earn a regular income stream. The first Singapore REIT (S-REIT) was launched by CapitaMall Trust in July 2002. As of February 2021, there are 42 REITs and property trusts listed on the Singapore Exchange (SGX), with a market capitalisation of close to S 100 billion, making Singapore the largest REIT market in Asia excluding Japan. They cover malls, offices, hotels, industrial assets and residential homes.
Although in Singapore REITs have been around for around two decades, many investors still seem unsure as to what to make of this asset class. Yes, it is similar to property in that it owns physical assets and earns rentals from tenants but its stock prices seem to act like that of any other stock, making it very volatile and, in the eyes of many investors, risky. Yet many would know of friends and acquaintances who have achieved capital gains and earn a regular income from strong REITs they have been holding for years.
My goal in writing this book is to help readers understand how REITs really work - in plain language. It is not meant to be an academic treatise or to give readers a superficial treatment of the different aspects of REITs. Instead, the approach I have used is a fundamental and intuitive one which a businessman would take before making any investment - be it in property, stocks or any operating business. The book does not recommend any specific REITs for investment but gives you the tools to pick a good REIT.
A deep understanding of REITs will increase your conviction in your investments and allow you to sleep peacefully during bouts of periodic market volatility. It will allow you to pounce quickly on undervalued REITs and realise strong returns. Some investors may well fin