Singapore REITs hit a 1-year low recently. The iEdge S-REIT Index, made up of 37 REITs listed on the SGX, was down 3% from a year ago, or 9% from its peak in Jul 2021. The performance has not been bad if we compare it to the US or China equities. Fear of rising rates The key reason that is causing REIT prices to fall is the anticipation of the rise in interest rates. REITs take loans in order to acquire capital intensive properties, just like individuals do. Higher interest rates mean that the financing cost is going to go up and that reduces the profits and dividends. With the pending rate hikes, it is logical that the REIT prices have to be adjusted downwards to incorporate the interest rate risk. Hence, the current factors driving REIT prices (as with most other stocks) are not fundamentals but macro. Improved fundamentals shadowed...