Singaporeans are familar with S-Reits, especially since S-Reits has been a good asset class to own in last decade till 2022.
However, in the current high interest rate environment, S-Reits share price have been falling recently. Similarly, HK developers share price also have been falling.
Currently, some HK developers may be offerring higher yield with lower leverage, compared to S-Reits.
Let's compare with same examples.
NikkoAM-StraitsTrading Asia ex Japan Reit ETF (CFA.SI)
Current share price: 0.745
Dividend Yield: 6.3%
HongKong Land (H78.SI)
Current share price: USD$2.90
Dividend: USD$0.22
Dividend Yield: 7.6%
Gearing ratio (from its FY2023 slides): 17%
Hang Lung Properties (101.HK)
Current share price: HKD$8.17
Dividend: HKD$0.78
Dividend Yield: 9.5%
Gearing ratio (from its FY2023 slides): 31.9%
Note: I have shares in Hongkong Land and Hang Lung Properties.
Both Hongkong Land and Hang Lung Properties are developing new malls/offices/hotels in China; they will be progressively completed between 2024 - 2030. So, their recurrent rental income could rise in coming years.
Thus, compared to S-Reits, it could be more worthwhile to hold HK developers with higher yield and lower leverage.
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