REITS General opinions.

That doesn't make it private
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But it's still owned by alot of investment management companies including capreit, they obviously all see value in it and want to be invested .
 
joe sod said:
But it's still owned by alot of investment management companies including capreit, they obviously all see value in it and want to be invested .
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Do all of these shareholders enjoy extra tax advantages over retail investors? I.e. do they need to pay any tax on dividends??
 
A lot of them would be pension funds, life funds and ARF assets managed by the investment companies - for example Irish Life

Pension funds obviously have tax adavantages ...

This would not be a lot different than the shareholders in most large quoted companies where the majority of the shares are held by pensions funds, etc etc
Individual shareholders are only a small proportion of shareholders in any major company these days

I think also, that if you hold your shares in nominee form ie through a broker, that your holding is shown as being held by the broker's custodian ie probably one of the investment companies listed
 
joe sod said:
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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is that not like saying Berkshire Hathaway have a large stake in say Wells Fargo or Coca Cola ?

is that Canadian REIT not publicly traded in Canada on their stock exchange ? , Im pretty sure it is
 
joe sod said:
But it's still owned by alot of investment management companies including capreit, they obviously all see value in it and want to be invested .
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sure but it still doesnt change the fact that as an alleged substitute for owning property the traditional way , its not a substitute at all , which isnt to say its not a reasonable investment , it is from an income generation standpoint but so are telecoms , the irish REITS act like utilities , they act nothing like the irish property market

the main Irish residential REIT pays a dividend currently of over 4% but so does a well known british investment trust and with the trust you get to own nearly a hundred British companies , far more diversification , I own the REIT im currently slating and done very well out of the commercial REIT which was recently bought by an american outfit but I bought both at a cheap price , anyone who bought even as recently as 2019 is down money, this despite the irish residential property market haven risen at least 20% in the past two years
 
REIT values are not linked to property prices except in a very general way.

Their share value is determined more by valuing of the dividend income using current interest rates or future expected interest rates.

recent and prospective interest rate rises have reduced their valuation.

In the long run, property prices do matter, as if property prices rise, then rents will rise as well, with a time lag, as the property markets realign owners and renters
 
jpd said:
recent and prospective interest rate rises have reduced their valuation.
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But isn't that the same for every investment including direct property investment ,interest rate rises will affect valuations maybe not immediately given that property is not traded on the market every second of the day like stocks are
 
jpd said:
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
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Is this not just a matter of opinion though, the fact is that hibernia and green reits were undervalued by the public markets and taken back private again. We will only ever find out if they were overvalued if the private purchaser puts them back on the market in the future at a loss, I very much doubt that is going to happen.
 
They move inversely to the bond Market and as the can be seen with the sole remaining Irish residential REIT ,are not in a good place right now, investors won't buy a REIT paying 4% when they can get 3% on a bond
 
Mind you, if the price drops further, then the yield will go up - no sign of rents dropping just yet
 
galway_blow_in said:
They move inversely to the bond Market and as the can be seen with the sole remaining Irish residential REIT ,are not in a good place right now, investors won't buy a REIT paying 4% when they can get 3% on a bond
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Yes but bond prices also move inversely to interest rates, as interest rates rise the bond purchased last year falls in price to match the new yield on new bonds.
Bonds were great investments for last 40 years but not now ,every dog has its day
 
joe sod said:
Yes but bond prices also move inversely to interest rates, as interest rates rise the bond purchased last year falls in price to match the new yield on new bonds.
Bonds were great investments for last 40 years but not now ,every dog has its day
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That's beside the point and the fact remains that the likes of REITS and utilities fall out of favour as the coupon on a bond rises as one is seen as much less riskier than the other
 
Also most REITs will use loan/bond financing as well as equity, so higher interest costs will reduce the yield in the future as the loans are rolled over at a higher rate
 
jpd said:
Also most REITs will use loan/bond financing as well as equity, so higher interest costs will reduce the yield in the future as the loans are rolled over at a higher rate
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But that's the same for most equities not just reits, the cost of financing goes up with higher interest rates that's why the stock markets in general are down but especially the growth stocks.
I take the point though about reits not being great at following the property market but that's the Irish political risk priced in. Michael d Higgins contributed to that again yesterday
 
joe sod said:
But that's the same for most equities not just reits, the cost of financing goes up with higher interest rates that's why the stock markets in general are down but especially the growth stocks.
I take the point though about reits not being great at following the property market but that's the Irish political risk priced in. Michael d Higgins contributed to that again yesterday
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Do REITS track the market accurately in any country?
 
Over the long term, yes - otherwise they would be broken up and the properties sold off
 
Looks like activist shareholders in ires reit want to take it private, they have no confidence in the board , they say they are wasting too much money on salaries and expenses for a relatively small company and are not realising the full value of their property portfolio. Looks like another reit will be taken private and probably will be no reits operating here soon
 
As long as they pay the existing shareholders a proper price somewhat nearer the market value of the properties rather than the current hugely discounted price (a competitive auction, anybody?), who cares?

So much for trying to entice foreign capital into the country to build much needed homes - I suspect that the current cost of building, rent controls and anti-eviction environment is a put-off for many foreign investors
 
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