Singapore REITs must brace themselves for 'secular trend' of interest rate hikes

Ditch expectations of cyclical trend.

According to OCBC, they believe this is the beginning of a long term secular, not cyclical, trend of rising interest rates (with the long-end driving the curve steeper in 2H13-FY14 and flattening out as the Fed lifts the short-end FFR anchor in FY15).

Higher discount rates and liquidity factors, due to capital reallocation across assets, would negatively impact prices of yield assets, such as REITs.

Here's more from OCBC:

To be clear, however, we need to put this in a full context as history shows that S-REITs can outperform in periods of rising interest rates.

For example, from Mar 2009 to May 2010, the FSTREI Index increased a whopping 102% as the 10Y SG bond rate increased 88 bps to 2.85%.

This performance was driven by improvement in underlying fundamentals; over that period, Bloomberg estimated blended forward 12-month DPU for the FSTREI Index bottomed out in Jul 2009 and subsequently grew by 12.8% over the next 20 months.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia