The last 2 weeks have not been easy for Singapore REITs investors. S-REITs have been dropping almost everyday with unusual volatility and transaction volume. This happened even when global central banks have been cutting interest rates which have boosted S-REITs’ share prices in the past.

Investors are wondering what has happened that triggered the huge sell down and whether there are any bargain hunting on REITs. I will share my views in 5 key areas:

#1 Performance

Year-to-date, the FTSE ST REIT Index was down 35%, which was performing worse than STI’s 31% drop. Some REITs have even dropped by close to 50% from the start of the year.

FTSE ST REIT Index vs STI Performance YTD 2020

The drop in S-REITs prices is definitely due to the expectation of lower rental rates, lower occupancy rates and potential devaluation of underlying properties due to the impact of COVID-19.