I live in Singapore and I am looking at investing my money on listed Real Estate Investment Trusts(REITS). These are trusts that hold real estate which are rented out and earn rental returns.
Typically I would be screening the REIT for its tenant base to see if they are from a Shariah Compliant industry and secondly see if their total conventional debt to total assets is less than 33%.
However most REITs exceed the 33% conventional debt to assets ratio in Singapore.
Given this situation, could I get a dispensation on this leverage ratio screen? There are very little safe Shariah compliant investment alternatives in Singapore’s and these REITs give us a chance to invest directly in good quality real-estate which earn rental income and are relatively safe.