Which Reit to pick?

 A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing properties. By law, 90% of a REIT's profits must be distributed as dividend to shareholders.

In Singapore Stock Exchange, there are more than 40 reits to pick and choose. How to start? 

First, I need to analysis the company financial health;

1. P/B ratio - price-book-ratio - measures the market's valuation of a company relative to its book value
2. ROE - return of revenue
3. DPU - Distribution Per Unit or dividend
4. NAV - Net Asset Value
5. Gearing Ratio - measure of financial leverage that demonstrates the degree to which a company's operations are funded by equity capital versus debt financing
6. Revenue Trend - is the revenue is growing or decreasing for the past few years
7. DPU Trend - is the DPU is growing or decreasing for the past few years

Since there are so many reits to choose, I group them in different groups.

1. 1st tier - strong and stable reits
2. 2nd tier - middle range price and growing reits
3. 3rd tier - low range price 

1st tier reits after gather all the information. Price and data base on 25th Sept 2020.

From the list, you can see that CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) ROE is very low mean revenue is not growing much. I think that's why both reits are merging now.

The best reits from the list are;

1. ParkwayLife Reit - high ROE, both revenue and DPU are growing.
2. Mapletree Ind Trust - high ROE and growing revenue.
3. Mapletree Comm Trust - high ROE, growing revenue and low gearing ratio.
4. Frasers Cpt Trust - high ROE, growing revenue and low gearing ratio

To better understand the reit before you invest, read financial report and portfolio will give you a inside of how well is the reit. Also take note of dividend payout ratio, if more than 100%, mean something is not right. 

This is my first blog, will continue to write more if I'm not lazy. 😂