Dissenting opinion: SREITs well placed to weather interest rate hike, says report

REITs yield thrice as much as government bonds.

While some analysts have raised the alarm over SREITs' susceptability to the anticipated interest rate hike next year, Coutts Investment Outlook 2015 Report is going against the flow by stating that SREITs offer good income streams that should well be able to cope with rising rates.

"The US is set to start raising interest rates in 2015 for the first time since the global financial crisis. This reinforces our preference for strong underlying businesses with growing earnings and dividends," Coutts noted in its report.

The report further stated that yields on Singapore REITs average 6.6%, nearly three times the yield on Singapore government bonds and even besting many emerging-Asia bond markets.

"Singapore's best combination of yield and growth is found in the industrial sector which includes three REITs yielding 7% with growing earnings and dividends," the report stated.

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