Despite my preference for "fixed income" and being a "landlord", the leverage mechanism of Reits and Management have been trying this days. Facts - Reits are mainly in downtrend and is hitting home with starts of QE. Interest Rates are not even in the picture yet. Things will be tough this year as well if the strong ones are also doing fund raising.
There are still few gems out there but is not a guaranteed profitability net-net. Meaning after Rights, Placements, Dividends and Market Value, are we better off is a big question mark.
Managers are securing funding to lower their gearing. Meaning no additional returns from the funding exercise. Isn't this much worst than investing in a lower yield property than current DPU ? Not sure i should classify it as one of ultimate worst sins.
The Property Market has hit the ceiling. We should be expecting book value hitting north but the market pricing seems ahead on that giving us a value proposition that is actually sliding with lower price and value.
I still view Reit a key segment in my portfolio but there is also a time for everything. At the mean time, do look at the trend chart and draw your own conclusion.
Happy Reit'ing !
Cory
19th Feb 2014
There are still few gems out there but is not a guaranteed profitability net-net. Meaning after Rights, Placements, Dividends and Market Value, are we better off is a big question mark.
Managers are securing funding to lower their gearing. Meaning no additional returns from the funding exercise. Isn't this much worst than investing in a lower yield property than current DPU ? Not sure i should classify it as one of ultimate worst sins.
The Property Market has hit the ceiling. We should be expecting book value hitting north but the market pricing seems ahead on that giving us a value proposition that is actually sliding with lower price and value.
I still view Reit a key segment in my portfolio but there is also a time for everything. At the mean time, do look at the trend chart and draw your own conclusion.
Happy Reit'ing !
Cory
19th Feb 2014
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