Investors shy away from SREITs on back of potential capital outflows

It could be triggered by rate hikes.

Potential capital outflows are keeping investors from pouring their cash into locally-listed REITs, a report by Maybank Kim Eng revealed.

“Clients’ chief argument for underweighting SREITs was an impending rate hike which could precipitate capital outflows from the sector.| stated the report.

Maybank Kim Eng also noted that it has an underweight call on the REIT sector because of strong supply, weak demand, rising interest costs and stretched valuations. 

“Strong flows into the sector gave little impetus to sell. Worries remained that outflows could be triggered by rate hikes. Little pushback on fundamental thesis of stretched valuations, strong supply amid weak demand, rising interest costs,” stated Maybank Kim Eng 

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