Bank deposits are giving a paltry 0.05% to 0.1%, hardly enough to beat the raging inflation currently in Singapore. Property prices are still sky-high. Singaporeans have lots of cash and they do not know where to deploy them to make their cash work harder. This is evident from the recent gold scams many fell prey to. Amid this low interest rate environment, real estate investment trusts (REITs) have been the talk of the town as investors chase for high-yielding instruments that give a bang for their buck. However, are investors looking to invest in REITs a little too late for the party? Before we answer that, let us examine a few hard truths.
Firstly, let’s take a look at the price/net-asset-value (price/NAV) and distribution yield of some REITs.
(Source: ShareInvestor)
It can be seen from the table that almost all REITs are trading above or very close to price/NAV. ......
