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As the result of a Brexit referendum remains uncertain, real estate investment trusts here are expected to brace for market jitters that may trigger volatility, and a recent report by OCBC revealed that REITs with UK exposure will be most affected.
Among the real estate players the report named is Ascott Residence Trust which owns four serviced residences in the UK. The four properties account for 12.4 percent of the trust’s total asset valuation as at the end of the 2015 financial year, and 13.0 percent of the trust’s total gross profit for the same financial year, OCBC research said.
The report also cited City Developments, which has 10.8 percent of its assets based in the UK as at end FY15, including its recent acquisitions of Teddington Studios and Stag Brewery land sites. It noted that 11 percent of the firm’s debt is also denominated in GBP which translates to a net currency exposure of S$382.6m.
“The 10 percent strengthening of GBP against the Singapore dollar would have resulted in additional S$38.2m profit before tax over the year,” OCBC research noted.
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