- Plateauing rates, an appreciating S$ and reopening of borders globally add to our positive view of S-REITs. That said, sticky inflation and a higher-for-longer thematic, a sluggish S$ bond market, potential recession and tight spreads make us pause.
- Sub-sectors we favor are hospitality, de-rated industrial landlords with new-economy assets and diversified commercial landlords.
- - Read this at SGinvestors.io -
- Frasers Centrepoint Trust (SGX:J69U),
- ESR-LOGOS REIT (SGX:J91U),
- Mapletree Industrial Trust (SGX:ME8U),
- - Read this at SGinvestors.io -
- CapitaLand Ascott Trust (SGX:HMN), and
- Far East Hospitality Trust (SGX:Q5T).
S-REITs – Macro Outlook
- Our house view foresees a mild global recession with global GDP growth projected to slow to 1.7% in 2023 from 2.9% in 2022. Inflation is likely to peak and start falling in 2023.
- We expect the Fed to raise interest rates to 5.0-5.25% by mid-2023 and hold at that level before cutting in 2024.
- Singapore’s GDP growth is likely to slow to 1.5% in 2023. We expect the MAS to tighten in Apr 2023 via re-centering. Likely peak of 3-month SIBOR ~4.8%.
S-REIT Sub-Sector Views & Stock Picks
- Read more at SGinvestors.io.
Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.
Krishna Guha Maybank Research | Li Jialin Maybank Research | https://www.maybank-ke.com.sg/ 2023-02-10
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