Make an altruistic investment in Singapore's future.

When I blogged about making a donation to NUS' university wide bursary program, a reader asked me, "What about NTU?"


As I make regular donations to NUS and I tell people about it when I have a chance, that was not the first time I was asked that question.


Well, honestly, I have more affinity towards NUS because I spent four years there. However, I do understand that there are needy students in NTU too.


So, in September, I decided to make a donation to NTU's bursary program to help needy Singaporean students there as well.

This is taken from NTU's website:


"The NTU, MOE, Donated and CDC/CCC University Bursary is open to Singaporean students."  Source: NTU.


Some readers might remember a rather disturbing episode that happened on my FB wall when I encouraged donations to NUS' university wide bursary program. 

By sharing the above statement from NTU, I have taken out the guesswork as to the beneficiaries of the program.

If we have the ability to be so, we should really consider being charitable and helping those in need.

Although there are exceptions, I do believe that most Singaporeans are charitable people.


There are many ways to make a donation to NTU. See options here.


There is also an option for making a donation online using a credit card: here.

AK made a $500.00 donation online.

Don't be shy to make a small donation as even $10 would go some distance to helping the needy.


In this instance, we would also be making an altruistic investment in Singapore's future.


Related post:
Making a donation to help needy students.

REITs: Leasehold properties revisited.

This is a brief reply to a comment from a reader on a topic which was rather hotly debated before: here.


Hi kh,

Investing in REITs, we have to understand something very basic and that is REITs distribute income. REITs don't distribute earnings. So, they do not account for depreciation or amortisation.

When we look at REITs, we mustn't look at them like how we would look at stocks where we look at earnings per share (which takes into account depreciation and amortisation).

When we buy properties, if they are not freehold, then, there is a lifespan. 

So, if we buy a HDB flat, theoretically, at the end of its 99 years lease, we have to to return it to HDB and the value of the flat becomes zero. So, on average, theoretically, it depreciates by slightly more than 1% per year.

To make investing in a property which has a 99 years lease sensible, theoretically, the yield should be 1% higher than a freehold property. This is to make it equally attractive. 

Whether that happens or not depends on many things and one of the things is that real estate, unlike other assets, are tied to locations.

I am using the word "theoretically" quite a bit in this blog post.

So, we are not wrong to ask wouldn't REITs with only leasehold properties end up with nothing one day if they keep paying out their income fully? Again, theoretically, yes.

However, real estate is unlike other forms of assets like machines, inventories or even cash. In an economy that does well, older properties could be worth much more too. Their values could, in fact, appreciate. 

REITs with leasehold properties could do quite well too by actively managing their portfolios. 

For example, a REIT could sell off older properties when the real estate market is strong and the values of their properties go up. Buy newer properties when the real estate market is weak and properties are cheaper. 

So, to me, the management's competence and motivation are more important considerations.

I think you understand the theory that if a REIT with only leasehold properties pays out 100% of its distributable income, it is not putting aside anything for depreciation. This is the way REITs work. 

REITs are allowed to hold back as much as 10% of their distributable income and I believe that it is a matter of time before S-REITs with mostly or exclusively leasehold properties do this to help address the issue of shorter remaining leases (i.e. depreciation).

In closing, I would say that whether to invest in REITs or not, there are many considerations. It would be a mistake, I believe, to be fixated with the issue of land leases.

Related post:
REITs: Leasehold properties.