Outlook for REITs in 2010.

I came across some video clips on YouTube where professionals talked about the outlook for REITs in 2010.  Some make good sense and I would like to share a couple of clips here with you:


 
I like their advice on how we should focus on the balance sheets of REITs as well as their acknowledgement that a low gearing level is safer in case real estate values are revised downwards again.  Can't usually go wrong being conservative when it comes to gearing.  For those of us who are in the know, treat this as a reminder.



Re-capitalisation exercises hit REITs big time in Singapore in 2009.  Off the top of my head, I remember forking out more money for MI-REIT and FCOTs' rights.  Re-capitalisation exercises have strengthened REITs and with the improving credit market, with funds more readily available at lower cost, I rather think that REITs will continue to do well in 2010 and 2011. 

What do I look out for in a REIT?  Low gearing, high yield and preferably trading at a discount to NAV.

Saizen REIT: Obvious uptrend.

Saizen REIT is in an obvious uptrend channel.  The closing in of the 100dMA and 200dMA indicates the formation of a stronger support level at 15c thereabouts.  It also suggests a lack of volatility in the longer term.  Thin trading volume as price goes sideways usually means more downward bias. 

However, given the trend of the longer term MAs, the downside is very limited from current levels.  Any upward push in price will meet with initial resistance at 17c and if this is overcome, the recent high of 18c might be tested.  I would accumulate on dips.

Please remember that I am investing in Saizen REIT due to its very cheap valuation and potentially high yield.  This is not a trade for me and I could hold this for a very long time.