REITs - Selecting REITs

Choosing a good REIT is like choosing any other value investment.

Assets = Real Estate
Debt = Debt
Returns = Rents + other payments received on the portfolio.

An investor must analyze and compare a REIT's:

• management quality,
• real and anticipated returns,
• yields, growth,
• reserves, and
• asset values.

Many of the techniques for common stock can be put to work here.

PE and price to FFO (funds from operations) ratios are examined as they would be for other businesses.

• Compare the PE and price to FFO for the different REITs.
• Relate these PE and price to FFO to their growth rates.

Also important is the price to book, or P/B ratio.

• A REIT trading below its per-share book value is essentially trading at a discount.

Remember also that REITs are not immune to :

• asset quality problems,
• bad management and management decisions,
• declining markets, or
• poor expense management.

Do the due diligence.

Malaysian REITs are:

• KPJ Reit
• Boustead Reit
• Amfirst Reit
• Axis Reit
• Hektar Reit
• Starhill Reit

and

• AHP
• AHP2
• ARREIT
• ATRIUM REIT
• QCAPITA REIT
• TWRREIT
• UOAREIT