REITS- An Update

Sometime back, I posted a piece on REITs. I have not updated it because there were hardly any interest for REITs. Nevertheless, the recent rally in the property sector may have crossed over to the REITs sector as we have witnessed some upticks in the prices of REITs.

I have done a study of all the REITs & tabulated the results below. There are a few things to note here:

1. Annual net profit is net off revaluation surplus or shortfall.
2. Where net profit for the past 4 quarters are not available, annualized net profit is computed. Such is the case with ALAQAR, AMFIRST, HEKTAR & QCAPITA.
3. Annual Income Distributed is based on 12 months' period. Where a REIT is listed for less than 12 months, I have ignored the Annual Income Distributed.
   

Based on the table below, we can conclude the following:

1. The REITs with the highest Income Yield is STAREIT, followed by UOAREIT.
2. The REITs trading at the lowest Price to Book (PB) ratio is AHP2, followed by AHP.
3. Generally, most of the REITs are trading at a Price to Earning (PE) ratio of about 13 times.
   
4. The REIT that trades at the highest PE & PB is QCAPITA.
   

Table: REITs Pricing Table as at May 25, 2007

Conclusion

If you are looking at maximising your stream of income, you may go with STAREIT or UOAREIT. The current effort by the substantial shareholders of Amanah Millenia Fund Bhd to dissolve the fund in order to unlock value may help to stir up interest in AHP & AHP2. Sometime back, you may recall CIMB privatizing the CIMB REIT because the market failed to accord that REIT its fair value. Would we be seeing something like that in AHP & AHP2?