S-Reits on acquisition binge amid low interest rates

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AMID a lower-for-longer interest rate environment, Singapore real estate investment trusts (S-Reits) are ramping up their acquisitions worth billions of dollars, according to market observers. Read more at The Business Times.

Just this week alone, three S-Reits have announced equity financing to partially fund their acquisitions - Keppel DC Reit raised S$478.2 million to fund its proposed acquisition of two data centres worth about S$587 million.AMID a lower-for-longer interest rate environment, Singapore real estate investment trusts are ramping up their acquisitions worth billions of dollars, according to market observers.

Similarly in July, Frasers Logistics & Industrial Trust garnered S$258.1 million via a placement to fund its proposed acquisition of 12 prime logistics properties in Germany and Australia worth A$644.7 million , and CapitaLand Commercial Trust carried out a S$220 million placement to pay for its acquisition of a German office building at a purchase consideration of 133.4 million euros .

"S-Reits have acquired overseas for diversification and growth, yet maintain strong balance sheets. An increase in leverage from 45 per cent to 50 per cent raises debt headroom by 10-14 per cent for AUMs , and opportunities for DPU-accretive deals," Mr Chua said. Singapore Exchange market strategist Geoff Howie noted that much of the world has seen a rotation into Reits on the outlook for lower interest rates, while slower growth outlooks have had much more impact on trade-related sectors.

 

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S-Reits ramp up acquisition binge amid low-rate environmentAMID a lower-for-longer interest rate environment, Singapore real estate investment trusts (S-Reits) are fast ramping up their acquisitions worth billions of dollars, market watchers say. Read more at The Business Times.
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