Chart of the Day: Here’s proof that SREITs are still better than government bonds

They offer much higher yields.

Singapore-listed REITs offer a safe haven for investors who are terrified of escalating market volatility, according to a report by DBS.

DBS noted that SREIts have outperformed both the benchmark Straits Times Index (STI) and property developers year-to-date, buoyed by demand from yield-hungry investors.

“The S-REIT sector trades at 0.9x P/Bk, and offers investors a yield of 7.1%. This implies a yield spread of 4.9% against the 10- year government bond of 2.2%,” DBS said.

“We believe current valuations are attractive re-entry levels and believe that large caps are likely to benefit as investors turn yield hungry in a tepid growth environment. Amongst S-REITs, our preferences are those with the opportunity to surprise on the upside through acquisitions or portfolio-specific catalysts,” DBS added.

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