Singapore REITs - RHB Invest 2024-06-26: A Long Pause & A Delayed Recovery

Singapore REITs - A Long Pause & A Delayed Recovery

Singapore REITs - RHB Investment Research | SGinvestors.ioCapitaLand Ascendas REIT (SGX:A17U) KEPPEL REIT (SGX:K71U) AIMS APAC REIT (SGX:O5RU)

S-REITs DPU expected to continue declining in FY24 before a recovery in FY25.

Key factors driving persistent S-REITs weakness

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  • Reason being the sharp spike in interest rates caused a surge in ultra-low financing costs that S-REITs enjoyed during the past decade. This has resulted in lower distributions, coupled with asset value decline from cap rate expansions (especially overseas markets) as investors demanded higher acquisition yields to offset the rising cost of capital.
  • Rising interest rates also resulted in a host of other higher yielding options available in the market, i.e. high quality corporate bonds, treasury bills, and fixed deposits narrowing yield differential, resulting in a significant capital shift.

What will drive a potential sector recovery?

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Singapore Research RHB Securities Research | 2024-06-26

Read More Analysis On Singapore REITs (S-REITs):
Analyst Reports on Singapore REIT Sector

Check Out Also The Summary Of:
S-REIT Share Price Performance
S-REIT Target Prices & Ratings


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