Singapore REITs seem to be overvalued. You agree?

I am seriously looking into singapore reits as a form of investment for passive income to fund my early retirement. After doing some research, it seems that the undervalued reits have prices that are below their NAVs. Unfortunately, I can’t find any that meets this criteria while maintaining a 7-8% yield on investment.

Most REITs such as FCOT and LMIR have price to book ratio of less than one. However, they are giving less than 6% returns. There is only one reit that is close to what I am looking for: AIMSAMP REIT. Currently, it is trading at book value and has a yield of 6.8%. Pretty close to my criteria and I might just pull the trigger on this investment. Looking at analysis, it seems that AIMSAMP is holding on to some land which carries lots of re-development potential. That might bring its yield up. Moreover, the 20 Gul Way project is expected to contribute to the dividends by 2013 so that is another plus factor on buying this REIT.

As I poured over the data, I am thinking about why are REITs in such demand. One reason might be the super low interest on saving deposits that are forcing investors to not leave any money in the bank accounts. I don’t know if this is a plotted move by the banks to make more money off us!

Anyway, Singapore REITs are definitely a viable investment to me because of capital appreciation and regular dividend payment. Are you looking to invest in any REITs?

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