[sgbuffett]

A discussion on MPACT. It has already fallen  more than 40%.

[sgbuffett]

A few years ago I posted a negative article on REITs and was attacked by reits lovers who  believed they were a very good if not best vehicle for passive income.

Times have changed since and many rather stay far far away from reits and plow their money into S&P500.

My understanding of reits have evolved over time and my first foray into reits was during the pandemic drop. I bought a basket of reits some have gone up some breached the covid lows.

One thing I learn is how to identify a bad reits fraud especially

I made many warnings about these bad reits before their collapse.

Warning of the collapse of US office reits
https://sgtalk.net/Thread-Serious-warnin...nts-BEWARE

Warning of collapse of Dasin reits
https://sgtalk.net/Thread-If-you-have-th...-red-flags

In 2019, I warned of the impending collapse of Eagle Reits.

In fact if you look at the reits space the performance is poor and the number of fraud is high. In fact it js actually worse than a normal stock.

Reits are geared and are vulnerable to both interest rate hikes and recessions. When they need cash they do rights issue to take money from investors which negates the use of such investments as passive income generators. 

There are many ways to perpetuate fraud due to lack of transparency like through master leases, loan covenants and inflation of propeprty valuations. The low standards of the SGX and regulators has turned this segment of the market into opportunities for fraud.

Always remember reits are just collection of properties whose value and rental yields van go up and down depending on economics environment. Often they are listed when the economic and interest environment is most favorable...they have limited growth potential and are sitting ducks for hard times to come.

[sgbuffett]

[sgbuffett]

Gabriel Yap's take....why has trading volume increased so much?

[sgbuffett]

Lay Long half price....

However, I do take issue with how the merger was done .....it looks to me they were taking good assets and they know the problems in China and HK ....so they wanted to merge to have the strong part support the trouble assets. Basically they acted against the interest of reits holders holding the pure Singapore assets.

Now they are selling one of the quality assets to pay down debts.incurred by the poorer quality assets.

The whole situations smells stinky. I believe they did the merger to avoid having to deal with troubles brewing for the overseas assets..

Anyway the yield is only 6.6% now. It is not yet attractive...neither is it compelling. The China/HK side will stagnate for some time so you are not going to see increase in DPU or substantial capital gains.

[talky]

at the moment there is no any reits worth to invest

u can buy cheap now 2 mths later can be cheaper n cheaper yr yields is not enough to cover the loss

come again after sep/oct

[sgbuffett]

at the moment there is no any reits worth to invest

u can buy cheap now 2 mths later can be cheaper n cheaper yr yields is not enough to cover the loss

come again after sep/oct

There are a few general problems with S Reits

• They previously borrowed at low rates. When the refinance at higher rates they pay more interest cost and DPU will go down. This continues for next 2-3yrs until all their debt is refinanced or interest drop substantially.
  
• Some rents are in problematic sectors like US offices, Europe offices where work from home is destroying the value of office rentals
  
• Those with property in Chna and HK were there is a glut plus economic slowdown driving down rentals. 
  

The above 3 problems are multi yr problems no and won't go away in next 12 months. Unless stock price drop more to pay investors q higher risk premium to compensate for next few years it is still not time yet. Now you see se juicy yields like 6-8% and salivating over this but this yield will go down by at least 2% to 4-6% due to the above problems. ...