Positive rental reversions
Rental reversions refer to the change in rental rates when a property lease is renewed by a tenant. Reversions measure the difference between the new and old rents and is a key metric used by REITs to assess the demand for their properties and the stability of their rental income....The REIT sector went through tough times over the past three years as high interest rates and soaring inflation crimped REITs’ ability to maintain their distributions.
Many REITs saw their distribution per unit (DPU) come under pressure as higher operating expenses and increased finance costs battered them.
Luckily, REITs can employ a variety of methods to mitigate the decline and these methods can also help to boost their revenue and asset base.
We will look at three effective methods used by REITs to boost their DPUs and provide some examples of Singapore REITs that have successfully used these strategies.
