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How long will the S-REIT rally last


The current sentiment on S-REITs appears to be quite bullish.

https://www.businesstimes.com.sg/real-estate/s-reits-tipped-for-further-gains-as-rate-hike-fears-subside


"Reits have been very resilient and consistent in outperforming the broader Singapore market," Mr Wong said, highlighting the defensiveness of the sector. "In uncertain times, they are pretty defensive because of the leases that are locked in. In bull markets... underlying property asset values and underlying rentals of the Reits also benefit from the up cycle."


The article further notes that OCBC is quite bullish on the retail sector, mentioning specifically the rejuvenation plans for Orchard road.  (As of writing, Starhill is trading at S$0.74 - heh). 

Maybank prefers the hospitality sector as the RevPAR (revenue per available room) appears to have bottomed out and the supply of new hotels have tapered.

But the valuations of most REITs have turned quite rich and it is now tough to identify a "bargain purchase".

One factor fueling this REIT rally may be the reverse(?) of Fed interest rate policy. Instead of interest rate hikes, are interest rate cuts actually back on the table? The Trump administration seems to be in favor of cuts, but it remains unclear how readily the Fed would bend to Trump's will.

I will likely consider selling some of my REIT holdings, if there is an appreciable capital gain. For REITs, capital gain may be regarded as earning dividends in advance. A 20% capital gain is almost as good as earning out three years of yield instantly. So there is no need to fret about having all that money "lazing" around in your savings account.  You will have three years to find a new home for these funds.

Over the weekend, I enjoyed an epic game of Borderlands with a couple of good pals. Just a couple of friends sitting front of a TV, listening to the claptrap from well, ClapTrap, senselessly shooting at screaming midgets, wielding ridiculous corrosive weapons, and generally, a ton of shits and giggles.  Things like these remind me why I am so emotionally vested in FI.

Because this is how life is meant to be lived, not stuck daily in a shitty cubicle, writing emails you are uninterested in, sending it to people whom you don't care about, and on behalf of people who exploit you.  No, thank you. 

Onward to FI friends. Best of luck!



Comments

  1. MMF SolutionsApril 8, 2019 at 8:53 PM

    Thanks for sharing this info. I like what you have said it here - this is how life is meant to be lived, not stuck daily in a shitty cubicle, writing emails you are uninterested in, sending it to people whom you don't care about, and on behalf of people who exploit you.

    Perfectly said.

    ReplyDelete
  2. Dividend Tech WarriorApril 10, 2019 at 12:47 AM

    Well said, my fellow FI warrior! :)

    ReplyDelete

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