Retail REITS have this huge overhang for years - online shopping. Naturally, REIT managers have to consistently address this "disruption" or risk their business falling behind.
One could simply look at how different REIT managers respond to these questions to tell you if you should be confident about their management skills or not.
SPH REIT recently concluded their AGM and Business Times reported the following:
As for questions on the rise of online shopping and e-commerce, Dr Leong said while this trend is getting more prominent, brick-and-mortar stores are still relevant, given that consumers still prefer to feel and look at the actual product before purchase.
Contrast this with Capitaland Mall Trust's respond back in 2015:
The mall has a two-prong approach: Loyalty program (CAPITASTAR) and testing online delivery platform at Raffles City.Also, the up and coming SingPost Centre by SingPost is not your typical run of the mill mall.
Also, their redevelopment of Funan is aimed at being a "experiential creative hub in a technology-enabled environment"
It will be a mall that combines both online and offline shopping. For instance, a consumer could browse in-store, purchase the product and arrange for delivery of the product directly to their home. The consumer could then continue shopping, watch a movie or have a meal in the mall without having to carry bulky shopping bags. The retailer, on the other hand, could save on storage space in the store as fulfilment would be done at the backend of the warehouse
You could easily tell that which management is still deceptive of the fact that change is real, and which are the ones that accept the challenge, and uses this as an opportunity and not a threat.
And it's no secret that if I feel that management is not doing as good as a job as they should be, then no matter what moat they might possess is kind of useless.
Good businesses + great management = great businesses to invest and hold.
For example, I blogged about how one company I used to be vested in seems to be in a defensive mode and trying to pacify shareholders instead of owning the issue at hand and tackle it.