Yields on preference shares and REITS

Dear Mr Tan,

Attached please find a list of a few bank preference shares and REITs in SGX for your reference.

Name	Annual Distribution	Price / Lot	Yield
DBS NCPS 6%  10	$                     60.00	$       1,046.00	5.74%
OCBC BK 4.2% NCPS	$                     42.00	$       1,000.00	4.20%
OCBC BK 4.5% NCPS 100	$                   450.00	$     10,050.00	4.48%
OCBC BK 5.1% NCPS 100	$                   510.00	$     10,441.00	4.88%
Ascendas-REIT	$                   134.80	$       2,060.00	6.54%
Cambridge Industrial REIT	$                     49.52	$          500.00	9.90%
Parkway Life REIT	$                     82.80	$       1,430.00	5.79%
Suntec REIT	$                   101.12	$       1,440.00	7.02%

The yield is estimated based on the latest known distribution/dividend (eg. for the last quarter results announced) and the closing price yesterday. The few REITs selected have been consistently paying distributions for the past years but as the prices have gone up, the yields look less attractive now. The bank preference shares pay a fix dividend, the yield can be improved if we manage to buy at a lower price. 

Personally, I will not venture to say shares are safe now, as there is great price volatility. Over the long term, the odds are they will give a better yield than fixed deposits/money market funds but with the risk of capital loss as the share prices are not considered low now. If we managed to purchase at the time of the last financial crisis, I would safely say that these will be high yield, long term investments.

KSL

My comments
Please take note of the comments about the preference shares as mentioned by Pang in the comments. It seems that dividend on the preference shares will reduce after a certain date to a lower level, based on the interest rate of the banks plus a spread. This will give a lower yield than the yield indicated above.