Jan 26, 2021
Investors made 7.5% on REITS since Sep
January 25, 2021
Steady buying in SGD REITS
We saw steady buying of SGD denominated REITS pretty much all of last year, except for a short period during the Covid sell off. This buying picked up pace towards the end of Q3 when Singapore Residential Non-Landed prices also started rising.
In fact, if we look at data only from September onwards, we see that the ‘buy story’ is pretty much REITS only. All other sectors put together have seen net selling
That is not surprising in itself. REITS are high dividend paying stocks which offer higher yields (with some additional risk of course) as compared to a pure fixed income investment and have a loyal following amongst a set of investors who like the risk/return profile.
What is somewhat surprising is that bulk of the buying seems to have been in retail oriented REITS. This is even though (as per URA website) retail property prices and rentals continue to fall
The average investor made close to zero returns on REITS last year (average was 0.33%) with volatility just a tad above 30%. However if we only look at the returns since Sep, then investors have made 7.5%
Conclusion (tl;dr)
- We have seen steady buying in SGD denominated REITS, especially since September
- Retail oriented REITS remain popular even though retail property prices/rentals have been falling
- Whether this buying is forecasting a recovery in retail prices/rentals, or whether investors simply like the dividend yields / risk-return etc. remains to be seen. I suppose we will find that out over the coming months
- Investors returns on REITS last year have not been great and the average is 0.33% p.a.
- However if we only look at returns since Sep, then we see that investors made an average return of 7.5%
Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.
