Should YOU Invest In Malaysian REITs? (Dividend Investing Analysis)

In this video, we talk about Malaysian REITs (Real Estate Investment Trusts), the benefits of investing in them, and some that you might want to consider for dividend investing.

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WHAT ARE REITs?

A Real Estate Investment Trust is when a company that and operates income generating real-estates on behalf of investors.

Some of them focus on just one piece of real estates, while others consist of a portfolio of real estate in different sectors.

WHAT ARE THE BENEFITS OF OWNING REITs?

REITS can be a better alternative for those of you who are keen on investing in property because you don't have to worry about managing real estate.

REITs also have a lower barrier to entry and is more liquid compared to physical real estate making it a favourite amongst investors.

We can buy and sell REITS whenever we want instantly with a few hundred or ringgit or dollars just like normal stocks, which is not something you can say about physical property.

HOW REITs WORK

A company will raise capital by issuing stocks of their company, and use it to buy real estate like shopping malls, hotels, or office buildings depending on the sector that they’re focusing on.

They manage the property entirely, making sure there are tenants, maintenance is in place, and the overall operation of the building is tip top.

After accounting for costs of all these, they’ll report a net income which will be distributed to shareholders in the form of dividends.

The companies managing it usually distribute at least 90% of their profits back to investors. This means that you can probably get a steady flow of income as long as the REIT you purchase is doing well.

WHAT MAKES A GOOD REIT?

1. Earnings

A REIT makes money through leasing the properties that they own, so there’s a few things you need to consider when choosing the right one.

A REIT that is seeing a growth in earnings is a good sign, because this means that they’re increasing their occupancy rate or managing to increase rent for existing tenants.

2. Economic sector

Investing in a hospitality REIT like YTLREIT would probably be bad for investors since travelling isn’t a big thing now with all the lockdowns in place.

On the other hand, if you think logistics will be a big thing in the future due to the growth in e-commerce sales, then that’s something you should probably look out for.

3. Dividend yields

Dividend yield is calculated by taking the dividend amount per share divided by the price of the share.

What we’re looking for here is essentially a good and stable yield, with an emphasis on stable.

Since the entire purpose of our investments in REITS is for the steady flow of cash, we’d wanna look for a dividend yield that is at least on par or higher than what we can get elsewhere.

BUT, you shouldn't dismiss a REIT just because it has low dividends (watch the video to find out why)

MALAYSIAN REITs WE LIKE

1. IGB REIT

Purely in the shopping mall sector owning both Mid Valley & Gardens.

2. KLCC & Pavilion REIT

Some exposure to office buildings with Pavilion Tower & Petronas Twin Towers.

3. SunREIT (Sunway)

The most diverse of them all, with malls, industrial areas, hotels, and even hospitals.

4. Axis REIT

A very diversified portfolio with offices, industrial zones, logistics, & manufacturing

5. ATRIUM

We can't fit everything in here, so make sure to watch the whole video to find out more :)

Timecodes:

00:00 - Should YOU Invest In Malaysian REITs? (Dividend Investing Analysis)
0:18 - What is a REIT?
0:40 - Who should invest in REITs?
1:02 - What are the benefits of REITs?
2:12 - How do REITs work?
2:54 - Why do people like investing in REITs?
3:33 - What to look for in REITs?
3:41 - REIT earnings and revenue
4:27 - REIT economic sector
5:10 - REIT dividend yield
5:36 - Warning signs of a bad REIT
6:35 - Why some REITs have low dividend yields
7:27 - What is dividend yield?
7:58 - Malaysian REITs we like
8:50 - IGB REIT analysis
9:07 - KLCC & Pavilion REIT analysis
9:16 - Sunway REIT analysis
10:03 - Axis REIT analysis
11:01 - Atrium REIT analysis
12:07 - Final thoughts

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Видео Should YOU Invest In Malaysian REITs? (Dividend Investing Analysis) канала Millennial Finance