Bookmark & Share
Demand for office space may improve later in the year but, rents are expected to remain flat; industrial REITs are expected to be the most resilient.
Maybank KimEng said Singapore real estate investment trusts (REITs) will witness a staggered recovery this year, with industrial REITs emerging as the most resilient.
Year-to-date, Singapore REITs have lagged in the market recovery despite improving fundamentals, reported Singapore Business Review (SBR).
“The sector now trades at 290 base points above the SG 10-year, and offers c.9% distribution per unit compound annual gross rate from 2020-22E,” said Maybank KimEng Analyst Chua Su Tye.
The brokerage firm noted a pullback from office REITs to offer a better risk-reward amid a recovery in Grade A REITs.
And while demand for office space may improve once more staff return to their workplaces, rents are expected to remain flat.
For industrial REITs, which is expected to be the most resilient, acquisitions are anticipated to gain traction over the coming months, said Chua.
Meanwhile, government isolation demand has artificially supported the hospitality sector, which is the most hit by the tightened COVID-19 safety measures. The brokerage said that such demand is expected to ease by the fourth quarter.
“RevPAR recovery remains slow into 2022. Capital is eyeing long-stay rental housing and purpose-built student accommodation assets, which will figure more significantly in assets under management,” said Chua as quoted by SBR.
Looking for a property in Singapore? Visit PropertyGuru’s Listings, Project Reviews and Guides.
Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.
Related Articles:
Strata office sales surged 106.6% in H1 2021