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While persistent supply glut in the local industrial, commercial, hospitality and retail spaces hits Singapore’s real estate investment trusts (REITs), those that diversify in certain regions will be able to dodge off this crisis, a report by UOB Kay Hian revealed.
According to UOB, REITs with more exposure to Europe, Hong Kong and Japan will witness a significant increase in their forward yields.
“We like deep value and well-diversified REITs with a significant overseas footprint, namely ART, CCT and MLT,” they said.
However, they expect those with more exposure to China, Malaysia and Indonesia to see a drop in yields.
“Well-diversified counters MLT, ART, CDREIT and FHT benefit in terms of hedged forward trading yields vis-à-vis forward trading yields,” they noted.
“ART will see a 57 basis points pick-up on a hedged forward yield basis while FHT and CDREIT both see 21 basis points and 21 basis points pick-ups respectively. MLT will see a 16 basis points pick-up compared with flattish pick-ups among its peers.”
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.