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What does a Real Estate Investment Trust (REIT) Investment Analyst actually do?

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In Singapore these days, in most equity investment circles (arguably), you’ll be hard pressed not to hear the term “REITs” mentioned, at least in passing. With a myriad of different types of REITs available for public trading on the SGX – think: Retail, Office, Industrial, Hospitality etc…-, there naturally has been quite a lot of interest generated viz the ability to own a ‘small piece of your favourite property’, via unit holdings in REIT stocks.

While visibility of the REIT itself is generally a given, not many people actually know what the investment team actually does, over and above….“investments I guess”.

Over here at Joy Management Services Pte Ltd, we are fortunate to have an ex-REIT Investment Analyst on board, so here’s a quick and dirty summary of what the job entails in general, although it may differ from REIT to REIT:

  • Investment research –
    1. Analysing property-related trends (think: supply and demand; footfall; keeping up to date on tenancies etc)
    2. Analysing macroeconomic data (GDP growth trends, key policy thrusts etc)
  • Financial modelling –
    1. Discounted cash flow (DCF), relative valuation, income capitalisation approaches
  • Property Feasibility Analyses –
    1. Analysing information memorandums from agents, developers and making conjectures (backed by research and analysis) to the investment committee
  • Financial & legal due diligence –
    1. Entering data rooms to verify the accuracy of figures provided (or obtain additional information needed for the model)
    2. Vetting legal contracts / documents (occasionally)
  • Meeting with agents / bankers / investors
  • Board meeting preparation –
    1. Presentation decks / documents detailing financial performance, investment pipelines, other REIT-specific updates

 

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