Saturday, 24 December 2016

2017: 3 REITs that AT will invest in for passive income

Merry Christmas to all my readers! I am very glad I made the decision to keep my blog running despite a long break. Thank you for your support! 

In this post, I will share a few REITs that are already on my watch list for 2017. They are namely Keppel REIT (K71U), Suntec REIT (T82U) and Capitaland Commercial Trust (C61U). I am waiting patiently for even lower prices to accumulate them.  

REITs are in a bear market for some time due to rising rates and weak economic outlook. Nonetheless, the strong portfolio of office and retail assets held by the following REITs is the main reason why they are on my watch list.  

They are all currently trading at a discount to their net asset value (NAV) with yield above 5.5%. I foresee they could drop lower in 2017 if the economy shows no sign of recovery and we are unable to see any growth in distribution per unit (DPU). However, I am not ready to pass up on the opportunity to shop for grade A office buildings at a discount (MBFC, Raffles City, Suntec City and etc.)!   

The target price (TP) in the table above is just for my own reference, and I believe there is a good margin of safety for both capital appreciation and dividend growth in the next few years if I accumulate below these price points.

You might be wondering why I only listed these 3 REITs? I am pretty sure that there will be many other good deals around in 2017, but these are the 3 that I follow more closely. It is my principle to only put money when I know what I am buying into. 

If you have other REITs in your watch list, do comment and share :)


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Financial freedom = Passive Income > Expenses. Always remember that there are two sides to the equation of financial freedom. Beside working on how to improve our passive income through investing, we should never neglect the expenses portion. By striving to improve both side of the equation, we can achieve our financial goals and win in the game of money.

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