Singapore real estate offers juicy yields

Singapore is enduring its worst recession since independence in 1965. But if there is a glimmer of hope, it is in the country's real estate investment trust market.

Life's tough all round at the moment, and Singapore is no exception, enduring its worst recession since independence in 1965. Salaries are being cut, working days reduced and GDP is heading for a fall of 5% this year. Yet expatriates, who flooded the tiny island state between 2004 and 2008, are staying put. Enrolments at international schools are steady and outbound flights are hardly batting people away. As one ex-hedge-fund manager tells Time: "This economic crisis is affecting every country. But if there is a glimmer of hope anywhere, it's here rather than in the US or UK." No more so than in the country's real estate investment trust (Reit) market.

Reits are listed companies that invest in a portfolio of properties, for example industrial units, offices and shopping malls. You can buy and sell shares in them like any other listed company, in return for which they manage the properties on your behalf and return the rent to you in the form of dividends. With property values across the world hit by the global recession, the 21 Reits listed on the Singapore Stock Exchange have seen their share prices tumble, and are now yielding around 15%, compared to the 4.64% yield you'll now get on a ten-year Singapore government bond.

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Jody Clarke

Jody studied at the University of Limerick and was a senior writer for MoneyWeek. Jody is experienced in interviewing, for example digging into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.