SREITs trail behind regional peers in terms of price performance in 2014

Can they catch up this year?

Singapore REITs lagged behind global peers in terms of price performance in 2014. OSK DMG reported that SREITs returned an average of 10.4% last year, led by the robust price performance of the office sector.

In comparison, Hong Kong REITS returned an average of 18.2%, while Malaysian REITs recorded an average return of 12.4%.

Japanese REITs surged ahead with an average return of 28.5%, boosted by quantitative easing in Japan.

“Going into 2015, we believe there’s still room for SREITs to play catch-up, especially in the next 6-9 months, with the flattening of the yield curve and before the Fed Fund rate liftoff (most expect at least in 2H15). For 1H15, we do not expect any major block that may derail the longer-term low-interest rate environment. Low DPU growth may persist, but we do not expect a significant downside risk to property prices in 1H15, especially in the office and retail subsectors,” stated OSK DMG. 

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