Real Estate Investment Trusts (REITs) for next Investment?

Discussion of the proposed Cashback Investment Club

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Real Estate Investment Trusts (REITs) for next Investment?

Postby Stiofan » Sun Mar 19, 2017 1:05 pm

I don't know a lot about REITs so was online having a good read and they seem like good investments. There is one with a share price of £3.37 per share and dividend of 18.50p so 3 times the cost and income of the other two but looks like a better run trust. Drum was launched in 2015, share price £1.40 that dropped to the current price of 97p! They own good properties though so may be a good investment long-term. Just my thoughts on them.

These are the ones I was looking at, just thought I'd share in case this was helpful for anyone ;-)

New River
https://www.share.com/find-investments/ ... ary/15943/

Tritax Big Box Reit
https://www.share.com/find-investments/ ... ary/21220/

Drum Income Plus Reit
https://www.share.com/find-investments/ ... ary/25367/

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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby garindan » Sun Mar 19, 2017 8:14 pm

Great to have more suggestions for us to look at.

I must admit I have no knowledge of these kind of things but perhaps others have and will chip in :thumbup:
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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby underdog » Sun Mar 19, 2017 11:24 pm

[Secretary] imutual Cashback Investment Club (CIC)

I'm making a profit of 12.5%...

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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby parchedpeas » Mon Mar 20, 2017 9:59 am

I think it's great we're getting some fresh input. I'm not hugely familiar with these things but I do think we're pretty cautious in our approach at the moment and it wouldn't hurt to have a 'punt' share holding at some point (maybe a vote to see if this opinion in shared?)

That said, property worries me at the moment with Brexit etc. so worth a good read into this sector as a whole.

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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby mike » Mon Mar 20, 2017 5:47 pm

I have personally got some Tritax Big Box.

Reits depend on the quality of their tenants. If the tenants are all blue chip and unlikely to go bankrupt, you can almost view them as an income bond. Provided the rent reviews are regular ( often 5 years) and the agreements are spread evenly over time, the income will be protected against inflation.

I hold Tritax as I think it fits this criteria. It won't make me rich but will maintain a yield of about 5% and the price will align accordingly.

REITs have to pay out 90% of their profits and so for new acquisitions, they frequently place extra shares which is a good time to buy as they are usually at a small discount to the market and free of transaction charges.

Another one is INTU who own lots of regional shopping centres (e.g. Trafford Centre and Lakeside). Their tenants are not so secure and so the price is more volatile (e.g. after collapse of BHS).

I think they are mostly for the accretion of dividends rather than the excitement sought by most members of our club

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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby garindan » Mon Mar 20, 2017 6:20 pm

This is a really interesting discussion and I must admit it is the first concrete idea apart from investing directly in FTSE companies that has been properly tabled, so thanks very much to our pending new member Stiofan for suggesting and starting the debate 8-)

Thoughts from me:

- if we are looking for a different type of income generator but nothing fancy or with the expectation of a massive price gain then this could be quite an interesting opportunity that will diversify our portfolio yet further

- i wonder how much the compulsory issuing of new shares dilutes the "value" of the share returns?

- I wonder, like mike, if this is "exciting" enough for us - not in a penny share kind of exciting but seeing the ebb and flow of the price as it rises/falls and, therefore, the potential for profitable exit as well as income

- that big drop on the DRUM share price worries me greatly, which makes choosing the right one very important, again as mike has suggested
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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby underdog » Mon Mar 20, 2017 11:39 pm

Up-to-date best buys:

http://investorplace.com/2017/01/7-best ... ld-growth/

https://www.fool.com/investing/2016/10/ ... o-buy.aspx

https://www.forbes.com/sites/laurelmogl ... 6631f37a8b

Some interesting choices for us to work through including a company that pays a dividend EVERY month!!!
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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby garindan » Tue Mar 21, 2017 8:27 am

I'm thinking, as a learning experience, it might be a good idea to look into investing in one of these but we need to do some good research per mike's advice. Buying the wrong one could cause us a problem.
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Re: Real Estate Investment Trusts (REITs) for next Investment?

Postby mike » Tue Mar 21, 2017 9:48 am

A lot of these REITs are FTSE 100 and 250 companies - Hammerson, British Land, INTU, Segro (formerly Slough Estates), Unite Group (Student accomodation).

The effects of inflation is merits discussion as in the long term, they should adjust provided that their business remains intact (like any other company).

They sometimes sell properties to recycle money into higher returning property (e.g. Unite sold some student property last week to help pay for acquiring a large chunk of Aston university's student accomodation).

The share placements do cast a shadow over the share price for a month or two when they happen, but they are usually careful to ensure that the project that they are fundraising for has a higher return than the existing portfolio.

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