Is It Time To Buy Singapore REITs?

What happened?

Many investors have been asking questions about REITs in the Beansprout Telegram community recently. 

This comes as Singapore REITs have rebounded from their lows with rising expectations of interest rate cuts. 

At the same time, rising fears of a recession in the US have led to volatility in global stock markets. 

To answer some of these questions, we hosted a webinar this week to discuss the fundamentals and outlook of Singapore REITs.

I also shared what I will be looking out for to determine where the share prices of the REITs are headed next.

If you had missed the webinar, here is the presentation I gave at the webinar.

Transcript of Webinar on "Is It Time To Buy Singapore REITs?"

Summary

• Interest rates will continue to affect the price of REITs
• Headwinds across most REIT sub-sectors. Borrowing costs for REITs may fall only from 2025. 
• Look for REITs with strong operating performance, healthy balance sheet, and attractive valuation
• Consider REIT ETFs to get broad based exposure to REITs

1:50 - 7:41 Market Update

• Market volatility driven by weak U.S. economic data, including low non-farm payroll numbers and rising unemployment rates.
• Impact of U.S. Federal Reserve interest rate policies and Bank of Japan's rate hikes on global markets.

7:49 - 11:26 Impact on Singapore REITs

• Elevated interest rates negatively affect REIT distributions and share prices.
• U.S. office asset REITs face the greatest challenges; Singapore retail and healthcare asset REITs remain more resilient.

11:26 - 12:31 Overview of REIT Subsector Outlooks

• Summary of REIT subsector outlooks, highlighting factors like interest rates and market demand.

12:33 - 16:14 Retail Sector

• Retail sales in Singapore weaken due to inflation and slowing tourist arrivals.
• Reduced tourism and inflation lead to decreased consumer spending.

16:14 - 17:43 Hospitality Sector

• Decline in hotel occupancy rates and revenue per available room after earlier peaks.

17:43 - 18:54 Office Sector

• Significant pipeline of new office space could impact rental growth.

18:54 - 20:26 Industrial Sector

• Strong demand for logistics and warehouse spaces; decline in business park occupancy rates.

20:26 - 25:57 Foreign Market Exposure

• REITs with exposure to foreign markets, particularly China, face challenges from weak retail sales and currency fluctuations.

25:59 - 27:05 Valuation and Dividend Yield

• Many Singapore REITs trade at discounts to book values, with varying dividend yields across subsectors.

27:06 - 29:58 Interest Rate Expectations

• Potential U.S. interest rate cuts later in the year could create opportunities for REIT investors, with the CME FedWatch tool providing insights.

30:59 - 34:59 How to Screen for Best Singapore REITs

• Use the Beansprout REIT Screener to look for Singapore REITs in positive sub-sectors, and compare their dividend yields, gearing ratio, and valuation 

35:00 - 47:22 How to Select the Best REIT using Beansprout's REIT checklist

• Use the Beansprout REIT checklist to understand the fundamentals, financial strength, and valuation of REITs

47:23 - 50:33 Consider REIT ETFs to gain diversified exposure to Singapore REITs

• Consider REIT ETFs for immediate diversification and exposure to a basket of different REITs.

Resources mentioned in the video

• Best Singapore REITs Screener Tool: Compare Singapore REITs to find the best REIT for your portfolio.

• Singapore REIT ETFs: How to choose the best one for your portfolio

• Mapletree Logistics Trust checklist

• Mapletree Industrial Trust checklist

Join the Beansprout Telegram group get the latest insights on Singapore REITs, stocks, bonds, and ETFs.

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