Hi Folks, welcome back to Investment Income For Life. This will be a short post. Interestingly, I came across a Youtube video from local Finance Influencer Chris Honey Money recently on why he sold off all his REITs. Basically, he did a 4-Year Experiment: In 2022, Chris scaled down his Syfe REIT+ portfolio to SGD 1,000 to track its long-term performance. The results were extremely disappointing for him. He asserted that after four years (with all dividends reinvested and management fees deducted), his Syfe REIT portfolio value dropped to SGD 998.70 (a loss of SGD 1.30). Then Chris went on to do a market benchmarking by mentioning that during a similar period, the broader Singapore market (STI) recovered and grew significantly (e.g., +23.5% in 2024 and +28.6% in 2025), whereas S-REITs struggled due to prolonged high interest rates.
BK's Thoughts
I thought it was really strange that Chris mentioned that he ended up with a loss on his Syfe Holdings since 2022. 2022 was actually the year whereby the US Fed did very aggressive rate hike from 0.25% to 4.50% within a year. Therefore, if one had bought REITs in 2022 and before the COVID period of a decade long super low interest rate environment, then it would be blatantly obvious that your SREIT holding will be biting the dust. But if you have been holding REIT for a decade (long term) or topping up or accumulating REITs at that juncture, you will be making great capital gain and also super high distribution yield of 10%+ on cost. You folks can refer to our friend at Investmoolah and his acquisition of United Hampshire US REITs during the downturn in SREIT market prices.
Personally, I can only conclude that Chris's short experiment and result conclusion are very strange indeed as it is too short an experiment. Also, if you were holding on long term to REITs, your dividends distribution would have way covered the decline in the capital value of your REITs at this juncture despite SREIT still being in doldrum mode. Anyway, I still believe that holding REITs is necessary for my own retirement portfolio.
Ok folks, have a great week ahead and may you all be well and happy always!
a reit strategy is really a long term buy. I am not sure of trading reits is a good strategy
ReplyDeleteAgreed. REITs are generally built for long-term income and compounding via distributions rather than short-term trading, where transaction costs and timing can easily work against you wor.
DeleteSadly, this year private property is on its way to beat UHREIT; the REIT needs to finish at US53 cents, ex-dividend, to stay comfortably ahead of URA's private residential property index. At US52.5 cents, it will be a close fight, but rental yield will win.
ReplyDeleteWorth writing to UHREIT's IR to push for a unit buyback (i have done it). At a ~30% discount to book, buying back their own 8.7% yield is one of the better uses of capital. And without it, I have a strong feeling that this year URA condo will beat UHREIT
Hi Bro, spot-on analysis. A unit buyback at an 8.7% yield and deep discount to book is a textbook accretive move—kudos for actively raising that to management. The race between physical property and beaten-down REIT yields this year is definitely tight, so it'll be interesting to see if UHREIT mgt takes any decisive action before year-end.
DeleteUnfortunately, its not in UOB interest to do buyback because there is no AUM increase. From the tone of the manager who is UOB Asset manager, they are not inclined to help unitholders, more interested in growing AUM. This is a risk of UHREIT and there is no law to help unitholders, so UOB will continue to milk the REIT. Same as what UOB has been doing to UOL and UOA
DeleteI think his conclusion based on his "experiment" is skewed, and unintentionally biased in a way, cos this period is just the period where banks shine and REITs get crushed. Well I still believe in diversification and holding on long term. Happy with dividends along the way. BFIRE
ReplyDeleteHi Bro BF, good points indeed! A well-diversified approach focused on sustainable dividends is a solid way to ride out those cycles toward BFIRE! :)
DeleteI don't follow his social media but if he is an investor in SG stocks, then I assume that apart from SREITs, he has diversified into other counters and also holds winners like SG Banks.
ReplyDeleteIn which case, isn't he making the basic investing mistake of selling his losers instead of taking some profit on his winners?
As for myself, I am thinking that SREITs are getting relatively more attractive and bought some Frasers CT this week.
Hi Hello World, valid observations man! It often comes down to individual portfolio rebalancing rules versus thesis changes. Nice pick with Frasers CT—valuations across several quality S-REITs are definitely looking more compelling lately. :)
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