When Manulife US REIT reported that its gearing when beyond the 50% mark in July 2023, there were several comments made about how it's the end of the road for the entity.

Such comments suggests that investors may still not fully understand this important metric, despite common references to it.

What exactly is gearing, and what does it mean for a REIT should it exceed the limits stipulated.

We take a look at this metric and clarify a couple of common misconceptions surround it.

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By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.