- The waning hope of a Fed pause or cut of interest rates in 2023 has impacted S-REITs’ share prices through 2023, with the latest declines seen in Aug 23, but we believe that we are close to an inflection point.
- - Read this at SGinvestors.io -
- With the latest revision in our FY24F estimates, our forecasts have now priced in the impact of an extended period of high interest rates. If at all, we estimate a further +10bps risk (less than 2% drop in DPU) that is yet to be factored in, largely from overseas S-REITs.
Growth to return in 2024
- Following the latest revision to our forecasts and after having priced in a higher average cost of debt for FY24F, S-REITs’ FY24F DPU will likely show growth and show a bottoming out in FY23, which is a positive.
FY24F EBITDA expected to grow 4% y-o-y; may offset some impact from higher-for-longer interest rates.
- - Read this at SGinvestors.io -
- Given the operational growth in FY24F, we expect a muted impact from higher-for-longer interest rates in FY24F, as seen in our DPU forecasts.
FY24F DPU signals return to growth.
- Read more at SGinvestors.io.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Rachel TAN DBS Group Research | Derek TAN DBS Research | Dale LAI DBS Research | https://www.dbs.com/insightsdirect/ 2023-09-18
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