Retail REITs suffer muted earnings in Q3

Sector DPU ended 3.4% lower.

Despite showing resilience amidst industry slump, Retail REITs closed 3Q16 on a soft note.

According to OCBC Investment Research analyst Andy Wong, Retail REITS ended the quarter with DPU declining 3.4%.

"There was negative impact arising from China’s transition of business tax to a VAT regime as well as a change in property tax basis imposed by Beijing which affected CRCT and Mapletree Greater China Commercial Trust," the analyst said.

Meanwhwile, weakness is also seen in industrial and hospitality sectors, contributing to the overall DPU growth of S-REITs under OCBC's coverage coming in at -0.8%.

"However, if we take into account significant one-off items, adjusted DPU would instead have declined by 0.4% YoY, based on our estimates," Wong stated.