Singaporeans love properties but what’s surprising is that many people still believe that physical property is the only way to invest in real estate.
Especially with the new ABSD and high-interest rate, it is getting more difficult to invest in Singapore’s residential property market.
In reality, there is an overlooked investment avenue that has lost its gained popularity in recent years – Singapore Real Estate Investment Trusts (S-REITs).
In this article, I will guide you through some of my past discussions about REITs so you can have a comprehensive understanding of REIT investing.
REITs were the T-bills back in the day
As an early adopter and advocate of REITs, I have been writing about this investment option for over a decade.
In case you are not aware, just a few years ago. S-REITs were as popular as Singapore T-Bill today. But it wasn’t always so.
Back in 2011, when the REIT market was relatively unregulated and less known, I penned my first blog article, “Two not-so-obvious risks of investing in REITs”.
In 2015, I started emphasizing the importance of considering REITs as a viable source of passive income.
Subsequently, the REITs market experienced significant growth and became a hot topic.
However, as with any financial market, increased popularity led to inflated prices and excessive enthusiasm. The term “REITiree” emerged, and some individuals even put their entire life savings into REITs.
Why too extreme of one thing is not good
In 2019, I raised awareness about the need for balance and caution in REIT investing through two blog articles:
- “Investing for Retirement: Why you should not over-rely on REITs investment”, and
- “REITs Investing for Retirement: Why You Can Still Suffer Massive Loss”.
Little did we know that the COVID-19 pandemic would hit in 2020, causing Singapore REITs to suffer losses of up to 40%. It served as a stark reminder that the fundamentals of REITs can change rapidly.
One high-profile case was Eagle Hospitality Trust (EHT) which focused primarily on hospitality assets in the United States. It was listed on the Singapore Exchange (SGX) in May 2019.
In 2020, Eagle Hospitality Trust faced significant challenges due to the COVID-19 pandemic, which severely impacted the global hospitality industry. The REIT experienced financial difficulties, including defaults on loans and an inability to meet certain financial covenants. These issues led to a series of events that resulted in the REIT being suspended from trading on the SGX.
In July 2021, DBS Trustee Limited announced that it would wind up Eagle Hospitality Trust due to its inability to meet its financial obligations, the ongoing impact of the COVID-19 pandemic on the hospitality industry, and the lack of viable options to restructure the REIT. This decision marked the end of Eagle Hospitality Trust as a REIT.
The winding-up process involved the sale of the REIT’s assets, with proceeds used to repay creditors and any remaining funds distributed to unitholders.
How to navigate the market moving forward
If you look at the chart below for the performance of Singapore REITs, you can see that I was mostly correct throughout the years.
The purpose of this blog post is not to boast about accurate predictions but to emphasize that investing is never a linear path.
Many financial “gurus” make sweeping comments, often driven by personal interests or exploiting our greed and fear.
The best defence against such misinformation is financial education.
There are around 40 REITs listed in Singapore. If you want to invest in REITs, you should understand their business first.
To help you kickstart your REITs investing journey, I have compiled a REIT infographic with the whole list of Singapore-listed REITs.
The 2023 REITs Symposium
If you’re genuinely interested in investing in Singapore REITs, I highly recommend attending the upcoming 2023 REITs Symposium on May 20th at Suntec City.
I will be present at the Influencer Meet-Up Session, and it would be a great opportunity for you to connect and clarify any burning questions you have about REITs.
This event will provide an excellent opportunity to deepen your understanding of REIT investing and network with like-minded investors.
Sign up at https://reitsymposium.com/highlights.html now, and hope to see you there.
Different types of Singapore-listed REITs
In my next article, I will talk about the different types of REITs and the benefits they offer. You can join our Telegram Channel or subscribe to my mailing list for the next updates.