- Downgrade S-REIT sector rating to NEUTRAL from Overweight. Amid rising interest rate volatility (likely to persist in the near term), we expect S-REITs' share price performance to be range-bound. We recommend investors stay selective and defensive, rooted on valuations.
- - Read this at SGinvestors.io -
- Overseas S-REITs, on the other hand, are trading at distress valuations and could see a sharp bounce back once the dust settles.
- CapitaLand Ascendas REIT (SGX:A17U), AIMS APAC REIT (SGX:O5RU), and Keppel REIT (SGX:K71U) are our picks.
US Federal Reserve (US Fed) rate path holds the key.
- - Read this at SGinvestors.io -
- As S-REITs are considered as yield instruments, its performance is highly sensitive to the interest rate curve. A key sector catalyst would be an earlier-than-anticipated rate cut or pause without significant deterioration in the economic outlook. The converse is a key risk.
DPU growth to flatten on rising interest cost pressures.
- Read more at SGinvestors.io.
Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2023-03-17
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