SREIT – Kim Eng

REITs Sector

♦ Defensive and high-yielding SREITs in the limelight amid stock market volatility

• REITs offer varying yields and geographical exposure. Attractive yields from industrial REITs, offering spreads over Government bonds of about 4%.

♦ M&A theme in focus

• Strategic review of MMP REIT signals possibility of privatization or M&A, in view of the relatively attractive P/B ratio.

♦ Watch out for retail REITs which have potential strong organic and inorganic growth

• Fraser Centrepoint Trust with several acquisitions from the Sponsor’s pipeline. Likewise for CapitaCommercial Trust and CapitaMall Trust for the strong management and direct benefit from CapitaLand’s capital recycling model.

♦ Inflation-hedged REIT

• Parkway Life REITs has an in-built rental mechanism that is hedged against increases in the consumer price index (CPI)

♦ Hospitality-centric REITs to benefit from higher room rates

• CDL Hospitality Trust (CDLHT) and Ascott REITs are well-positioned to enjoy higher RevPAR, given the rising hotel room rates. CDLHT could be best proxy to Singapore’s hospitality sector.

Tables here