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S-REITS see shaky performance in 2022

The previous year saw 6% in total returns for 2021. 

Singapore-listed real estate investment trusts (S-REITs) find themselves in a bumpy position due to stagflation and an impending interest rate hike, according to a report released by RHB.

According to the research, S-REITS are positioned to ride out these obstacles due to the REITs offering one of the highest yields globally. Inorganic growth from acquisition and merges are also expected to help the sector survive. 

Also helping them stay afloat is a sector gearing of 37%, which is below the regulatory limit of 50%. Around 77% of S-REIT’s debts are also hedged, with the sector average interest cover at 5.2x and a weighted average debt maturity of 2.8 years. 

Industrial and office REITs, meanwhile, were seen by RHB to be the preferred sectors. This is due to an earnings resilience for industrial REITs. On the other hand, hospitality REITs are expected to be at around 6-12 months away from an increase in numbers.

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