- We retain our POSITIVE sector view on S-REITs but expect range-bound performance in the near-term. Preferred sub-sectors are hotel, industrial and retail.
- We summarize takeaways from recent investor meetings and company roadshows in KL. Investors are in select large caps but unwilling to chase further. Questions were on next drivers for the sector beyond lower yields and related discussion on lower financing expense and capital recycling.
Search for the next set of sector drivers
- - Read this at SGinvestors.io -
- Office seems to be on the radar, and whether street concerns on supply and hybrid work is already in the price. We think trend of positive net demand and/or redevelopment of older assets should prompt a turnaround. Higher level of pre-commits for the near-term supply (Keppel South Central, Paya Lebar Green) will also help sentiment.
- - Read this at SGinvestors.io -
- In addition, given the news flow around Johor-Singapore Special Economic Zone (SEZ), Special Financial Zone (SFZ) and the rapid transit system (RTS), it appears that diversified commercial plays are preferred.
- In a few meetings, there was concern on shorter land leases (especially for industrial sector, China) and the negative impact on NAVs given cap rate compression is unlikely henceforth.
Meeting takeaways
- 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/.
Maybank Research | https://www.maybank.com/ 2024-10-10
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