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UK REAL ESTATE

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RDI REIT

This UK REIT pays a 10% dividend yield and recently consolidated shares showing signs of hitting the bottom. Not only is this security trading at a massive discount, but its future looks stronger with as the Brexit cloud passes over.

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@ArthurHouse,

You may well be correct but let me offer you a counter view. UK REIT is paying 10% to encourage current investors not to sell with Brexit uncertainty and potential drop in house prices looming should the worst happen for the UK economy. It is also trying to encourage potential new investors with this 10% dividend yield. Is this really sustainable?

With REIT's they can borrow money to purchase real estate and this is great in a housing 'boom bubble' with low interest rates. When interest rates begin to rise and the housing market begins to cool and decline they can be faced with lots of redemptions, higher financing costs, etc. 

There is most probably a very important reason why it is trading at such a massive discount!

No one knows how long the Brexit Cloud will last net alone when it will pass over. 

My personal opinion is to wait for the drop in house prices before pulling the trigger on UK real estate. If the worst was to happen and the UK was faced with a serious recession then we could see anywhere from 10% - 30% drop in house prices. 

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its certainly a riskier play but potential for those good ol rewards. I don't know if I see a sell off with brexit. Devaluation of GBP should counteract that and I'm not convinced there is enough Euro demand for UK housing (in the same way as there is from middle east and Asia).

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@cryptotrader,

You may wish to have a look at this article from the Guardian:

UK house prices fall at fastest rate in six years on back of Brexit – Rics

https://www.theguardian.com/money/2019/jan/17/uk-house-prices-fall-at-fastest-rate-in-six-years-on-back-of-brexit-rics

You may also wish to read this articles below too:

UK house prices: Brexit wipes 25 per cent off value in wealthiest areas

https://inews.co.uk/news/uk-house-prices-brexit-latest-property-market-values/

How a no-deal Brexit will affect house prices, according to property experts

https://inews.co.uk/opinion/comment/no-deal-brexit-how-affect-house-prices-uk-consequences-explained/

UK has not officially even hit a recession yet. UK has not officially concluded Brexit yet. This is just merely based on uncertainty and anticipation of negativity.

Also the tax rules on Buy-To-Let has changed meaning what was a very attractive prospect now is not as attractive. 

I am not suggesting that houses prices will definitely drop. The simple truth is I do not know. However if I wanted to invest in a property investment trust then I would want to get some serious value so that I can maximise my capital growth and for this I would want to see the bottom (from charts) confirmed and an uptrend before investing my hard earned capital into such an investment vehicle for real estate. 

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