Finance costs
With interest rates poised to remain higher for longer, income investors should keep a close watch on REITs’ interest costs. In particular, they should monitor the interest expenses as a proportion of the REIT’s rental income to get a sense of how badly the high-interest rates are impacting the REIT. As an example, Elite Commercial REIT (SGX: MXNU) recently reported its 2023 earnings. Finance costs came in at GBP 12.4 million for 2023, taking up nearly 33% of the commercial REIT’s revenue of GBP 37.6 million. This proportion was a sharp jump from the...The REIT sector is not out of the woods yet.
Inflation in the US has remained elevated, rising by 3.5% year on year in March.
Because of this headline number, investors are now less confident that the US Federal Reserve will cut interest rates.
With the REIT earnings season fast approaching, here are five aspects that investors need to watch out for.
