- S-REITs share price have corrected by close to ~9.1% (total returns of -5.6%) since the beginning of the year.
Sticky inflation rates a potential “spanner in the works” for rate cut expectations.
- - Read this at SGinvestors.io -
- That said, we find the overall valuations of S-REITs appealing, trading at an average 0.78x P/B (-1 standard deviation) and FY24F yield of 7.0%. These valuations translate to a yield spread of ~4.0%, a level that has historically attracted significant allocations back to the sector.
Pace of interest rate increases is decelerating.
- - Read this at SGinvestors.io -
- While interest costs are still rising, 4Q23 recorded the smallest quarterly increase (+0.1% q-o-q, +0.7% y-o-y), indicating that average portfolio interest costs are aligning with current market conditions.
- The normalization trend expected in 2H24/2025 could provide an additional boost to DPU growth, which we have yet to factor into our projections.
Financial metrics resilient with most S-REITs staying within their defined limits.
- 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/.
Derek TAN DBS Group Research | Rachel TAN DBS Research | Dale LAI DBS Research | https://www.dbs.com/insightsdirect/ 2024-03-07
Read More Analysis On Singapore REITs (S-REITs):
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