REITS General opinions.

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TeslaTim

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Hi I know discussing specific shares is not allowed but in general what do people think of REITS as an investment option.
 
They are good steady investments like utilities, generally they rise a bit every year and you get your dividend payments. They don't follow the property market per se ,the huge inflation in the housing market is not particularly reflected in reit valuations. Because reits are traded on the stock markets well then the stock market gyrations are a bigger factor than property market stuff. They are also affected somewhat by political stuff , they got walloped in 2020 after the SF election result but have fully recovered from that and covid now
 
I believe that the majority of the returns from investing in REITS will be in the form of dividends (as opposed to capital appreciation). Dividends are taxed at your marginal rate. So REITS are a great investment for Irish people in the lower tax bracket. But a very tax inefficient investment for Irish people in the higher tax bracket.
 
I was very pleased to see Hibernia being bought out last Friday , I bought fairly heavily into it in February 2021

agree about REIT,s not tracking the on the ground property market , they do not , they are income vehicles , are they a better investment than direct property ?

I dont know , probably are for people who dont want hassle of property management
 
It's obvious that the private market see that reits are undervalued by the stock markets and are moving to take them private. Already green reit and now hibernian reit have been bought out by private equity.
So it looks like the option to invest in irish reits won't be there for much longer as they all get privatised. The question is why were the stock markets not able to value them fully?
 
Or, put another way, why are private equity funds over-valuing them?

I presume it is the political risk as the financial numbers are there for everyone to see and evaluate
 
joe sod said:
It's obvious that the private market see that reits are undervalued by the stock markets and are moving to take them private. Already green reit and now hibernian reit have been bought out by private equity.
So it looks like the option to invest in irish reits won't be there for much longer as they all get privatised. The question is why were the stock markets not able to value them fully?
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If you're thesis is correct, that might lead one to believe that the residential REIT IRES is a good buy as it might get bought out like Hibernia did ?
 
Private Equity may take a longer view and realise that whatever SF do will eventually be reversed as the policies prove to be unworkable and full of nonsense - this could take a few years. After all, the Soviet Union lasted 70 years before collapsing
 
jpd said:
Private Equity may take a longer view and realise that whatever SF do will eventually be reversed as the policies prove to be unworkable and full of nonsense - this could take a few years. After all, the Soviet Union lasted 70 years before collapsing
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Yes isn't that essentially the short comings of the stock markets. Warren buffet said that in the short term the markets are a voting machine but in the long run they are a weighing machine.
Sure look at the oil and commodities markets today they were ultra cheap for the last decade, the cheapest they have ever been. Was the stock markets correct to value them only based on short term dynamics. At the same time though private equity wasn't racing to take these private either
 
galway_blow_in said:
I was very pleased to see Hibernia being bought out last Friday , I bought fairly heavily into it in February 2021

agree about REIT,s not tracking the on the ground property market , they do not , they are income vehicles , are they a better investment than direct property ?

I dont know , probably are for people who dont want hassle of property management
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I made a small investment also,like a lot of people I began to dabble in shares during lockdown.Hope this isn't bordering on speculating about specific shares,but would an experienced investor cash out now at 1.62 in case the proposed buyout falls through? Or hang around for the proposed 1.64 in total when deal goes through.Not a lot of difference in my case due to number of shares held, so really just wondering what the big hitters do in such scenarios.
 
theo67 said:
I made a small investment also,like a lot of people I began to dabble in shares during lockdown.Hope this isn't bordering on speculating about specific shares,but would an experienced investor cash out now at 1.62 in case the proposed buyout falls through? Or hang around for the proposed 1.64 in total when deal goes through.Not a lot of difference in my case due to number of shares held, so really just wondering what the big hitters do in such scenarios.
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The 1.64 comprises 1.60 per share and a four cent dividend , I sold just below 1.63 two weeks ago
 
jpd said:
Private Equity may take a longer view and realise that whatever SF do will eventually be reversed as the policies prove to be unworkable and full of nonsense - this could take a few years. After all, the Soviet Union lasted 70 years before collapsing
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Isn’t private equity usually more short-term in its thinking?
 
REITs seem to me to be tailor made for a pension investment (as dividends won't be taxed, and they're a steady utility type of investment). Given the discount to NAV that many of them exhibit from time to time, private equity will swoop on them if they drop below value thresholds. And private equity property funds investing into Ireland still enjoy huge tax advantages over private investors and retail REIT shareholders. Hence you have a well funded Private Equity class of investor, who has tax advantages, bidding to buy REITs from retail investors who don't enjoy these same advantages and hence will value the REITs at higher multiples.
 
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Daithi7 said:
REITs seem to me to be tailor made for a pension investment (as dividends won't be taxed, and they're a steady utility type of investment). Given the discount to NAV that many of them exhibit from time to time, private equity will swoop on them if they drop below value thresholds. And private equity property funds investing into Ireland still enjoy huge tax advantages over private investors and retail REIT shareholders. Hence you have a well funded Private Equity class of investor, who has tax advantages, bidding to buy REITs from retail investors who don't enjoy these same advantages and hence will value the REITs at lower multiples.
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So why did private equity not swoop on IRES two years ago when price was 40% lower ?
 
galway_blow_in said:
So why did private equity not swoop on IRES two years ago when price was 40% lower ?
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That's a good question in some ways I suppose, and i haven't been following the IRES Reit specifically tbh.. But it's the discount to NAV and potential future return on investment that they're (and any investor) is most interested in, so in that sense price is the wrong metric to be judging whether to invest or not. It's simply not any way the full part of the story.
 
REITs on the surface seem like a far superior option to straight property investing these days but unfortunately they have failed miserably to in anyway track the on the ground market , so much so that they are not any kind of benchmark at all in terms of how the irish property market moves

4% dividend yields can also be found in well known UK investment trusts and not only have you far better diversification , you are buying into highly liquid assets , the irish REIT,s have tiny trading volume daily
 
galway_blow_in said:
So why did private equity not swoop on IRES two years ago when price was 40% lower ?
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I think ires is already partly private anyway ,well not actually private but not fully traded as an independent entity, I think it's partly owned by cap reit a large Canadian reit company
 
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