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Reits Symposium 2016: Take-Aways

We went to the REIT Symposium 2016 at Suntec City Convention last Saturday.
Below are some points we think you might be interested to know and also some other points you should take note of.

1. Singapore REITs ETF to be launched soon on SGX
An REITs ETF based on the current SGX REIT Index will soon be in the Singapore market for retailers. Instead of having to pick and diversify across the asset types that each REIT is geared to specialise in, retailers now can opt for a REITs ETF which covers all different real estate types and capitalise on the property market as a whole. The structure and exact conditions in place are still unclear as there are not much information being released on this in the event. However, we certainly can look forward to something new in the market that will be beneficial to retailers.

Update: More information can be found here in this link: http://www.businesstimes.com.sg/companies-markets/sgx-sets-its-sights-on-first-etf-for-singapore-reits

Is MBS REIT Possible?

4. Invest in Units instead of Spending Cash
Re-invest into REITs units when you get dividends from them. Keep the bonus REITs shares that are given to you instead of selling them. Over the long-term, your goal should be to accumulate more units in a REIT instead of accumulating more cash payouts from the REIT (even though that is the ultimate goal).
As you accumulate more units, you will in turn receive a larger payouts in the future.
The reason to avoid getting more cash is because of the tendency for us to spend that cash instead of investing it back to reap greater returns for the future.
However, do note that you might want to consider diversifying the income to different REITs; avoid being too concentrated in a particular REIT(s).

Recommended Post: Are Shares really Riskier than Bonds?

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