Interest In Singaporean REITs Starts to Fall

Singapore’s REITs, and in particular their juicy yields of sometimes more than 7 percent, had gained in popularity as interest rates fell, but with the U.S. Federal Reserve beginning to taper its asset purchases and global interest rates headed higher, that popularity is getting a bit thin.

“It’s a theme which has lasted for quite a period of time,” Gibson noted. “People want yields as a starting point, but they also want growth,” he said. “For Singapore, the growth is relative anemic. There’s not a huge amount of upside.”

Ong also noted that interest in REITs has been waning, with the segment’s average daily volume falling from around $80 million (USD) to around $35 million to $40 million daily in December. “The interest is all gone,” he said. He expects this will affect the performance of the new listing.

While Ong noted the OUE Commercial Trust managed to land several cornerstone investors, there were no big institutional funds among their ranks, which were mostly made up of Chinese individuals.

Henderson’s Gibson said he’s giving the listing a pass. “We can get a higher return from other markets,” he said.

The trust’s growth prospects appear somewhat limited; while its sponsor has three more office assets it could offer to the REIT, rising interest rates may make the acquisitions unpalatable.

via CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.