AMID a lower-for-longer interest rate environment, Singapore real estate investment trusts are fast ramping up their acquisitions worth billions of dollars, market watchers say.
Vijay Natarajan, property analyst at RHB Securities Singapore, said S-Reits have been on an acquisition trend this year due to conducive market conditions, with a"prolonged low interest rate environment" benefiting Reits in terms of greater investor appetite for yield instruments, and access to cheap funding costs.
Analysts from Maybank Kim Eng also see industrial S-Reits as likely beneficiaries, especially as they push further into Europe and the US. The brokerage cited MIT, Ascendas Reit, Frasers Centrepoint Trust, CDL Hospitality Trusts and Far East Hospitality Trusts as their top picks due to DPU recovery, yields and acquisition-growth upside.
"There have also been reports this year that institutional investors have been turning away from private equity real estate and infrastructure investments in favour of liquid funds that put their money to work faster," added Mr Howie.