S-Reits are renowned for their defensive play due to high dividend payout offsetting capital gain. However with recent market pull back as funds are selling out, S-Reits will not be spared the selling down either. Long term investors should take this opportunity to collect S-Reits.
1. S-Reits earnings so far have been stable resulting in stable distribution payout and should have no problem in maintain that in year 2011 and with some could even pay higher distribution after acquired quality assets lately. With the share price falling due to funds selling out, this would bring up the dividend yield to a more attractive level.
2. Singapore like other Asian countries are facing the risk of inflation and even though banks raise interest rate to curb inflation the dividend yield obtain from S-Reits still very much higher than putting the monies in banks to earn that interest rate.
3. S-Reits with strong sponsor, proven earnings record and distribution payout should have no problem in rebound in share price if the funds were to coming back.
Ascendasreit, Mapletreelog, MapletreeInd, CapitaMall Trust, SuntecReit, CDL HTrust, CapitaComm Trust and K-Reit are those that could attract funds to re-invest in if they moving back to Singapore.
