{"id":2494,"date":"2022-04-19T11:45:38","date_gmt":"2022-04-19T03:45:38","guid":{"rendered":"https:\/\/www.syfe.com\/magazine\/?post_type=guide_article&p=2494"},"modified":"2022-04-19T18:10:19","modified_gmt":"2022-04-19T10:10:19","slug":"what-is-a-reit","status":"publish","type":"guide_article","link":"https:\/\/www.syfe.com\/magazine\/guide_article\/what-is-a-reit\/","title":{"rendered":"What Is Syfe REIT+?"},"content":{"rendered":"\n

Syfe REIT+ is a portfolio holding 20 of the largest Singapore REITs. These REITs cover all real estate sectors from retail to commercial to healthcare. Launched in partnership with SGX, Syfe REIT+ is an easy way for investors to earn passive income. <\/p>\n\n\n\n

How REITs work <\/strong><\/h2>\n\n\n\n

REITs sound complex, but they are really just real estate investment trusts that own various types of real estate such as shopping malls, offices, industrial parks, hotels and hospitals.<\/p>\n\n\n\n

In general, REITs operate by leasing out the properties they own. Their revenue primarily comes from rental income, 90% of which must be distributed to its unit holders (investors) in the form of dividends. Simply put, if you\u2019re a REIT investor, you\u2019ll likely enjoy relatively steady recurring income for as long as you own the REIT.<\/p>\n\n\n\n

REITs pay out dividends either quarterly or semi-annually. One key term to understand is DPU, also known as distribution per unit. It tells investors how much dividends they will get for every unit of the REIT they own. <\/p>\n\n\n\n

Apart from receiving dividends, investors can also benefit from capital gains when the share price of the REIT moves higher from its purchase price.<\/p>\n\n\n\n

REITs are an easy way to invest in real estate<\/strong><\/h2>\n\n\n\n

Investing in REITs is an easy way to add real estate<\/a> to your portfolio and earn passive income.<\/p>\n\n\n\n

First, REITs allow you to own a piece of property for much less. A physical property costs millions<\/a>, but you may purchase REITs from just a few hundred dollars. Between REITs and rental properties, REITs also provide rental income with much less risk, time, effort and initial capital outlay.<\/p>\n\n\n\n

Additionally, REITs are great for diversifying your portfolio since they represent a different asset class from stocks and bonds. You also get to invest in multiple properties at once since most REITs hold a mix of assets. For instance, Mapletree Commercial Trust holds VivoCity, Mapletree Business City, and three other properties in Singapore. As such, investing in a REIT reduces the risk that may come with simply investing in one property.<\/p>\n\n\n\n

REITs offer attractive dividend yields<\/strong><\/h2>\n\n\n\n

For income investors, the allure of REITs is compounded by the fact that they offer higher dividend yields compared to other asset classes, even in the current interest rate environment. <\/p>\n\n\n\n

The average dividend yield for Singapore REITs is 5% – 6%. But for 10-year Singapore Government Bonds and 12-month bank fixed deposit rates, their yields are currently about 1.9% and 1% respectively.<\/p>\n\n\n\n

How to invest in REITs <\/strong><\/h2>\n\n\n\n

Similar to stocks, S-REITs are listed on the Singapore Exchange (SGX). You can buy shares in a REIT the same way you\u2019d buy shares in any other listed company.<\/p>\n\n\n\n

There are six main REIT segments you can invest in:<\/p>\n\n\n\n