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Q&A from reader regarding land leases of REITs
By Making Passive Income  •  July 9, 2012

I received this question recently and a couple of days ago, somebody asked the same question with regards to land leases of REITs. This is an interesting question and much debated topic, especially for industrial REITs which have the shortest land leases compared to other categories.

Question:

I was hoping to share with you one pressing concern i have about reits in general and i would really value your response. My concern is that the nav and the intrinsic value of reits is directly correlated to the lease period. My greatest fear is to see the unit price fall drastically as its lease Period shortens year by year. We do not see this happening as yet because the singapore reits are now generally young and they have a healthy lease period remaining.

For those taking a buy and hold strategy for reits, they may possibly suffer from this depreciation ...

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By Making Passive Income
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