MARKETS & INVESTING | Staff Reporter, Singapore

Chart of the Day: S-REITs' dividend yields lag Eurozone and Hong Kong

S-REITs' overall dividend yield stands at 2.7%.

S-REITs offer one of the developed market's highest dividend yields at 2.7% which trails only behind the Eurozone and Hong Kong, according to Maybank Kim Eng.

Also read: S-REITs maintain strong gains in January

The headline figure is higher than dividend yields of REITs in Australia, Japan and US.

"S-REITs to deliver >2.6% yield spread over SG 10-year bond; and at 16-year average spreads," analyst Chua Su Tye said in a report.  

S-REITs distribution per unit (DPU) is also set to grow 1.3% in 2019 and 2.0% in 2020 from 0.5% in 2018 with strong performance from the office, retail, hospitality and industrial segments, according to an earlier report from CIMB. 

“Looking ahead, with market pricing in prospects of a “pause in FED hikes” in 2019, we believe that the coast remains clear for S-REITs to deliver further outperformance. With DBS economist now projecting the Singapore 10-year bond yields to rise by only 25bps by end-2020 to 2.35%, we see prospects for further compression in the current forward yield spreads of 3.65%,” analyst Derek Tan of DBS said in a separate report.

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