REITs roll out desperate tactics to drive growth in tough times

Check out these interesting trends seen in Q3.

REITs are struggling to keep investors happy as growth slows. A report by Barclays highlighted some tactics that REIT managers have used to keep their results solid in Q3.

Barclays noted that more REITs are embarking on acquisitions to diversify their portfolios, particularly in light of the cooling domestic property market. For instance, AREIT embarked on an acquisition spree in Australia, while MLT has also snapped up properties in Australia and Vietnam.

More REITs are also propping up their falling dividends with divestment gains, such as KREIT and Suntec.

Lastly, REITs are turning to issuing perpetual securities to reduce their gearing after the MAS imposed a single-tier leverage limit of 45% in July, such as KREIT and AREIT.

“Our quarterly scorecard shows industrial REITs in general performing better than expected with average DPU rising 5% y/y and 1% q/q, helped by a positive policy change. Office REITs continued to show signs of cracks. While Fed rate hikes remain an overhang for SREITs, valuations don’t look expensive,” said Barclays.