Mapletree Greater China Commercial Trust's Gateway Plaza (Photo: Mapletree Greater China Commercial Trust)Mapletree North Asia Commercial Trust's Gateway Plaza (Photo: Mapletree North Asia Commercial Trust)

OCBC Investment Research has maintained an ‘overweight’ rating on Singapore REITs despite emerging concerns over Donald Trump’s victory in the US presidential elections, and a slowing economy.

In an investment report issued on 15 November, the bank, which monitors 24 Singapore-listed REITs as part of its research coverage, noted that 21 of these have met its expectations for results released in the third quarter of calendar year 2016.

Two of the REITs fell short, while one exceeded its expectations, said OCBC, while also noting that overall DPU growth for REITs under the bank’s coverage came in at -0.8% for the quarter.

“However, if we take into account significant one-off items, adjusted DPU would instead have declined by 0.4% year-on-year, based on our estimates”, said OCBC, adding that sharp corrections in the prices of Singapore REITs have culminated in undemanding valuations.

“We maintain ‘overweight’ on the [Singapore REITs] sector for now, and believe investors should bargain hunt on quality REITs, especially those which have underperformed the sector”, it said.

OCBC highlighted Frasers Centrepoint Trust, Keppel DC REIT, Ascendas REIT, Frasers Logistics & Industrial Trust, and Mapletree Greater China Commercial Trust as its preferred picks.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.