Singapore REITs lured by lower capital costs in India and China: report

Growth prospects are also brighter in the countries.

With growth outlook turning bleak in the city-state, Singapore’s real estate investment trusts (REITs) are turning to sweeter conditions in Singapore’s Asian neighbors.

According to a report by Jefferies, this is due to dividend growth prospects and lower cost of capital in countries like India and China.

“The yield curve has become volatile and hence narrative around taper tantrum déjà vu has become a bit commonplace,” the report noted.

Meanwhile, Jefferies added that the decline in bond yields and spreads for China and India is lowering the cost of capital,

“Offshore REITs with assets in these countries are positively impacted by lower funding cost and compression in cap rates,” the report noted.