- The outlook for most of the property assets owned by REITs remains positive despite an economic slowdown, buoyed by China’s re-opening. However, the recovery in office rents could slow down with accelerating tech layoffs.
- A pause in Fed interest rate hikes could reduce the risks of higher interest costs for the REITs. In addition, most S-REITs have comfortable debt levels.
- S-REITs offer an average dividend yield of 7.6% as of December 2022, significantly higher than the 10-year Singapore government bond yield of 2.8% now.
- We expect retail REITs to be more resilient in an economic slowdown compared to office REITs. Investors looking to build passive income without analysing individual REITs can also consider a REIT ETF.
What happened?
We’ve seen greater interest in the Singapore REITs (S-REITs) since the start of the year. The Straits Times had an article suggesting that S-REITs may be “ripe for a relook” after their poor performance last year....
