Generally, reasons why people buy property applies to Reits. There are 4 reasons to buy property: capital appreciation, diversification, rental income as well as hedge against inflation.
Property prices, does not fluctuate as much as compared to asset classes such as stocks and bonds. This means if you hold property together with stocks, for example, the overall fluctuations of your portfolio is reduced. Resulting being able to sleep soundly at night knowing that your net worth is unlikely to change much on a daily basis, compared to the returns you can receive.
Capital appreciation comes about because Singapore is a relatively land-scarce country. If demand for land outstrips supply, prices are likely to rise. For the past 10 years, average property prices have doubled or triple. This works out to an average yield of more than 7 percent a year.
Lastly, property is regarded as a way to protect against inflation, or rising prices. When prices in economy goes up, rents and property values might go up also.
Source by: Marine Blue Capitaland