REITs are opening their cheque books as interest rates are expected to remain low for a prolonged period of time.
With the COVID-19 pandemic still raging, governments around the world have slashed interest rates to stimulate their respective economies.
Lower rates may be bad news for our local banks, but offer businesses a chance to borrow money at a cheaper cost to fund growth.
One sector that is benefiting from low rates is REITs.
REITs rely on substantial levels of borrowing to fund property purchases and carry out asset enhancement initiatives.
These loans are usually refinanced rather than repaid, so low rates end up being a boon for REITs as it allows them to pay lower levels of finance costs for their debt.
Many REITs have made use of ultra-low rates to gear up to finance acquisitions that are accretive to their distribution per unit (DPU).
Here are three such REITs that recently conducted acquisitions that will allow them to grow their DPU for 2021....