Not all Real Estate Investment Trusts made money

You thought that real estate investment trust (REIT) offers quarterly dividends to investors, you can do no wrong when investing in REITs. Think again. I am not impressed with some REITs.

Back in 2010 and 2013, we were invested in several REITS. The unsatisfactory ones include the following:

REIT Price on purchase ($) Current price ($) Change (%)
Keppel Reit 1.369 1.06 -22.6%
Cambridge Ind Trust 0.69 0.56 -18.8%
Saizen Residential 0.55 Suspended

Keppel Reit lost 22.6% based on the latest price on the stock exchange. Cambridge Industrial Trust lost 18.8%. I sold Saizen Residential before capital distribution in 2016 and did not have the advantage of this distribution.

Because price per unit had declined the dividend yield shot up. Dividend yield is Dividend divided by Price of unit and therefore when the denominator in the formula decreases, dividend yield rises. One cannot be too happy when dividend yield looks very high. Look at the reason. It could well be that the particular Reit is losing favours with investors and there was a sell-down of the Reit.

REIT Dividend Yield (%)
Keppel Reit 6.0
Cambridge Ind Trust 7.3

Copyright © 2017, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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5 Responses to Not all Real Estate Investment Trusts made money

  1. Goh says:

    There was a general offer for Saizen at 1 dollar plus. If you bought in 2010/2013 and held it, you would have made a fair bit of money.

  2. Goh says:

    Sorry to hear about that. Also happened to me before for other stock.

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