REIT- Real Estate Investment Trust stocks-Do they really exist in CSE?

WildBear

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Property market in SL is said to be slowly recovering after the property bubble in 2008-2009. In some countries REIT stocks are preferred by retailers as regular dividend stocks as by definition they should pay 90 % of rental earning as dividends(ref- http://en.wikipedia.org/wiki/Real_estate_investment_trust). Do we have such REIT stocks in CSE, Most property stocks like CTLD,CSD,OSEA,CLND do not pay out such high ratio of dividends. However most of the property stocks in CSE trade lower than their NAVPS eg- CTLD,CSD,OSEA.
How is the future of this sector. I feel OSEA will lead the way if they become successful in Havelock city.

Your views are welcome, especially those who are interested in Property Sector

rijayasooriya

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I am keeping OSEA in my PF as a longterm investment.Even in this bear market it is bit stable.

Roboticfx

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rijayasooriya wrote:I am keeping OSEA in my PF as a longterm investment.Even in this bear market it is bit stable.

same!

WildBear

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rijayasooriya wrote:I am keeping OSEA in my PF as a longterm investment.Even in this bear market it is bit stable.

Hi, how do you take NAVPS of property companies, Should they trade closer to their NAVPS or we should consider their Earning Capacity as well when valuating a property related stock. Most of property companies trade below NAVPS now, but their P/E ratios are high owing to lower income generation.
One Investopedia writer says REIT stocks should be trade closer to their NAVPS but not in higher multiples as occur in other stocks. This is quite understandable, when there is a land of 10 perches worth 10 million, 1 perch should trade at 1 million(Despite it's an income generating property or just a bare land), and if it trades at 0.5 million, shouldn't we consider them as a bargain?.

m2_yapa

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OSEA have an another factor to keep in your portfolio...
That is foreign Holdings comparatively to others..

rijayasooriya

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WildBear wrote:

rijayasooriya wrote:I am keeping OSEA in my PF as a longterm investment.Even in this bear market it is bit stable.

Hi, how do you take NAVPS of property companies, Should they trade closer to their NAVPS or we should consider their Earning Capacity as well when valuating a property related stock. Most of property companies trade below NAVPS now, but their P/E ratios are high owing to lower income generation.
One Investopedia writer says REIT stocks should be trade closer to their NAVPS but not in higher multiples as occur in other stocks. This is quite understandable, when there is a land of 10 perches worth 10 million, 1 perch should trade at 1 million(Despite it's an income generating property or just a bare land), and if it trades at 0.5 million, shouldn't we consider them as a bargain?.

Yes in property companies I also think it is more suitable to look in to NAVPS rather than P/E ratio.But in case of OSEA I like to pay more emphasis on P/E ratio also as it is not just a property company.

Last edited by rijayasooriya on Sun Apr 01, 2012 9:59 pm; edited 1 time in total

greedy

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These shares trade below their NAV but with a higher P/E multiples. I think these properties are under utilized. I mean the rental must be below market rental. Some properties of these companies are used by related companies (subsidiaries, associates etc) for a rental. If these rentals are at market rates is a big question. And also one should look at how accurate these property valuations are! When it comes to loan loss provisions in banks, banks used to have good valuations of their collateral Smile

. So it is critical some one look at the valuation assumptions used in these property valuations.... probably the auditors provided they have adequate resources to do that.

WildBear

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greedy wrote:. Some properties of these companies are used by related companies (subsidiaries, associates etc) for a rental. If these rentals are at market rates is a big question.

There is a valid point, Properties that mostly occupied by their parent or associate company are generally poor income generators despite their good Asset Value. Eg- YORK,CSD,COMD etc. on the other hand when the tenants are unrelated they have good earning on their assets and therefore low P/E ratios, with payment of regular dividends too. Eg. CTLD,OSEA

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REIT- Real Estate Investment Trust stocks-Do they really exist in CSE?

1 REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Fri Mar 30, 2012 8:29 pm

WildBear

2 Re: REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Fri Mar 30, 2012 8:32 pm

rijayasooriya

3 Re: REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Fri Mar 30, 2012 10:28 pm

Roboticfx

4 Re: REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Sun Apr 01, 2012 5:15 pm

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5 Re: REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Sun Apr 01, 2012 6:20 pm

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6 Re: REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Sun Apr 01, 2012 9:57 pm

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7 Re: REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Sun Apr 01, 2012 11:06 pm

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8 Re: REIT- Real Estate Investment Trust stocks-Do they really exist in CSE? Mon Apr 02, 2012 10:07 am

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