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Top Singapore-listed property trusts saw their dividend yields hit a five-year high, attracting to global investors seeking refuge from the oil price slump and jitters over the weakest economic prospects of China, reported Reuters.
Using comparable month-end data available during the past five years, a Thomson Reuters analysis of 14 real estate investment trusts (REITs) showed that the median dividend yield as at end-January was 6.7 percent, the highest since April 2011.
Notably, the end-January spread between Singapore’s 10-year government bond yield and that yield was also at its highest during the said period, at 4.4 percentage points.
The yield trend provides a timely reminder of the allure of investments related to brick and mortar like REITs, which generally offer stable income streams.
“We believe current (REIT) valuations are attractive re-entry levels and believe that large caps (large-capitalisation trusts) are likely to benefit as investors turn yield-hungry in a tepid growth environment,” said DBS analysts Derek Tan and Mervin Song.
Meanwhile, the REIT horizon may be littered with clouds, with Singapore trusts facing a potential industrial and office space supply glut, the report said. Some prospective tenants, on the other hand, may hold off on new leases amid the same macro-economic concerns plaguing the financial segments.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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