Abby, REIT stands for "real estate investment trust" and it is not the only way to invest in real estate.
As smoulder pointed out, by buying into a single
property (or a few properties), you are putting all your eggs into one basket. With a single property, you might have a higher return but you do so at greater risk. You are hoping that rents cover your capital costs, tax, and maintenance costs, then you hope that when you resell, you'll make your profit on an appreciated property price. This is why you are wise to ask what the effect of a 40 year lease will be on future prices.
REIT's are a very specific type of real estate investment in the USA. By law, a REIT must derive at least 75% of its gross revenues from rents and royalties. A mortgage REIT must derive at least 75% of its gross revenues from interest earned on real estate mortgages. In other words, REIT's are designed to produce income through rents. They are not focused on capital appreciation, ie, buying a property, then selling it for more than was paid.
In the USA, REIT's have underperformed the S&P 500 for almost a decade and by several percentage points, so a reasonable question is: Why invest in a REIT? Commercial real estate is really soft right now in many places (I can't speak to Singapore, though), so I judge the longer term prospects of REIT's to not be that good.
You can also invest in real estate through partnerships, sometimes called REIG's... real estate investment groups. For example, as a limited partner, I invested money in a warehouse, the vacant land next to it, along with about 50 other limited partners. The general partner built another warehouse on the vacant land from the money the limited partners contributed, then we sold the whole thing to Amazon about 3 years later and made a killing. The capital appreciation was amazing.
But, here's the thing. There are a lot of sophisticated real estate investors out there, people who know about every piece of real estate for sale in a given area, people who watch comparable sales, people who track historical records. The chances are very good that the B1 industrial unit you looked at has already been examined by sophisticated investors, and they don't want it. So, the question becomes, "If they don't want it, why would you"? Now, if you have an inside track about this property, that's an entirely different thing.
Bottom line: I think REIT's will continue to underperform for the next decade and except for an investment I made in Crown Castle, which leases cell phone towers (and whose investment results, so far, are very disappointing), I wouldn't touch a REIT.
You'll make the most money through a real estate investment group (REIG) but you must thoroughly understand what you are getting into because the risks are higher as well. I have a brother in law in the business; he saw a golden, one time opportunity, we all took it with him, and it paid off. Might not be so lucky next time, and I have passed on additional investment opportunities.
Finally, you have single commercial properties, and really, if the sophisticated and knowledgeable investors haven't already jumped on the property, you really ought to ask why. Commercial real estate investing is a complicated business, and you should have at least a passing knowledge of how to compute returns, reserves, operating income, and a lot more... and that holds true for REIT's and REIG's as well.
If you wish, I can post a list of links to a website that will give you an excellent education in the basics of commercial real estate valuations. It's all about the return.
