DBS sees strong demand across Asia for Singapore REITs

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DBS Investment Research has been marketing Singapore’s REITs and property stocks across Asia over the past few weeks, and opine that there is still potential upside in the sector despite the recent run-up in unit prices.

“In the [Singapore REIT] space, investors appear [to]prefer the office and hospitality sub-sectors given the expected recovery in physical market, although we have seen interest in retail REITs given that share performance have lagged other subsectors year-to-date”, said DBS in a research note circulated on 28 August.

The bank noted that overall, Singapore REITs reported a 5% growth in distributions for 2Q 2017, with 7% and 8% year-on-year growth in revenues and net property income respectively.

Although sequential performance for these metrics are generally flat, DBS senses positive sentiments from managers of Singapore REITs during discussions on the sector’s outlook.

The bank has also given its analysis on each of the sub-sectors in the Singapore REITs universe, starting with industrial REITs.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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