reits 掉的好厉害

shelly062013

Unclear timing of rate hike causing Reit jitters

According to Knight Frank, office spot rents grew at a slower pace of just 0.2 per cent in Grade A+ buildings in Raffles Place and Marina Bay quarter on quarter in Q1. Office Reits have traded down about 7 per cent year to date, making them the biggest laggards compared to other sub-sectors.

The industrial property sector faces a similar oversupply situation, as well as a slew of restrictions - on strata sub-division and space occupied by anchor tenants, seller stamp duties, shorter land tenure, longer minimum occupation periods before asset sales - all of which are measures by the government to cool industrial property prices and rents.

Retail is on a structural downtrend, plagued by labour costs and online competition, while hospitality is faced with falling tourist arrivals - a 5.4 per cent drop in the first four months of this year - and weak regional currencies which make Singapore an expensive destination.

Maybank has an "underweight" recommendation on Reits, with "sell" calls on CapitaLand Mall Trust (CMT) and Ascendas Reit. UOB Kay Hian has a "sell" on CMT too, citing retail weakness, while RHB recommends "buy" for its economies of scale and low gearing. OCBC Investment Research and RHB are neutral on Reits, citing rate fears. Different houses are more pessimistic on different sub-sectors with no clear consensus.