Translated by Andrew Vanburen from: 靈活風險低以紙磚頭代樓 (中文翻譯, 請閱讀下面)
THE SEEMINGLY endless stretch of depressed valuations, high inflation and low interest rates continues with no end in sight, leaving few viable options for investors on where to put their hard-earned money.
For those of us looking for a stable bet with gradual, near-guaranteed returns, I would recommend the brick and mortar sector, i.e. real estate.
Pure rental counters are admittedly hard to find, so one has to look more closely into market potential.
Wharf Holdings Ltd’s (HK: 4) mega-retail venue Harbour City in Kowloon and shopping center/office tower complex Times Square in Causeway Bay are two such assets, but both have not been alone in operating under the shadow of the global economic downturn and the bearish sentiment in Hong Kong, with rental incomes having slipped by 20-30% in some cases.
Therefore, perhaps real estate investment trusts (REITs) are a better bet these days.
Yes, these investment vehicles that bundle a sometimes motley assortment of real estate assets and mortgages into an investible entity were until quite recently considered a dirty word on bourses worldwide.
As REITs are more arcane than a direct, straight-up listed developer, they can sometimes be misunderstood and manipulated, with some pointing to their prominence in 2008 as one of the major tipping points for the global economic meltdown, taking major financial institutions like Lehman Brothers with them.
At the very least, they are likely to provide stable investment income if they are more heavily weighted with pure rental assets, so I would recommend only those REITs with at least 90% exposure to this revenue stream should be seriously considered during these tough times.
But just as a few years ago when gold was being touted, non-believers outnumbered believers, and look who’s laughing now.
I believe that recently, rent-based REITS -- like gold investing -- never promise to double returns overnight, and it is a strategy more suited to the patient, long-term investor with a low tolerance for risk.
Progress is intolerably slow for some investors, and that is understandable.
However, I believe that too often for the conservative retail investor, overemphasis is put on the number of edifices, shops and parking spaces, and too little attention is paid to footfall traffic, location and consumption trends down the road.
In other words, successful investors in real estate – and REITs in particular – have a habit of assessing more than the brick and mortar assets of a particular investment and look also to growth trends two, three or even five years into the future.
Perhaps readers would be better served to reference Skills of a Winning Investor (投資必殺技) which more thoroughly explicates the theoretical value versus intrinsic value debate.
Property purchases invite high rental income risk
We’ll call the unlucky heroine of our instructive story “Yizi.”
Out of a sense of familial obligation, she rather blindly accepted her younger brother’s request to put the young man’s property investment in her name.
Rather than buying a few residential units here and there based on affordability and location, the younger brother had convinced his big sister that by buying an entire apartment building, they could maximize their returns and win back their investment in a matter of months, not years.
Yizi reluctantly agreed to her sibling’s reasoning and put the entire edifice in her name.
Soonafter, the financial meltdown appeared on the horizon, tenants began moving to cheaper digs, those who decided to stay renegotiated for lower rent terms – citing the economic downturn – and the apartment building soon had many darkened windows at night and became a loss-making investment for Yizi and her brother.
However, REITs allow a broader exposure to different regional markets and income scales which means that the lower-end units will generally have less vacancy issues during sporadic downturns.
In Hong Kong, Yizi’s case study is a seldom seen story, fortunately, because few possess the capital or cheap loans to afford buying entire residential complexes.
I believe this makes for an even more compelling case vis-à-vis the benefits of REIT investing these days in the Hong Kong market.
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(文: 黃國英, 豐盛融資資產管理部董事)
當然，散戶不信REITs，有其現實原因。板塊在本地出現，不足十載，不如傳統藍籌，沒人有長揸賺錢經驗，中財技倒地險情，反而時有所聞。但這些年來，財技已漸到盡頭，可選的仍有一、二。Rule of thumb是逢新勿入，不信邪者請參考人仔REIT。懶做功課，單騎領匯也不算冒險，政府在財經領域的產物，往績不差，港鐵(0066)、iBond(4208)可為佐證。
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