Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-Retail, industrial REITs most resilient - Maybank

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STOCKS NEWS SINGAPORE-Retail, industrial REITs most resilient - Maybank Sep 3rd 2012, 02:19 Sun Sep 2, 2012 10:19pm EDT Maybank Kim Eng said funds are not likely to switch out of Singapore real estate investment trusts (S-REITs) as there are not many investable alternatives in the market, and within this space retail and industrial REITs are the most resilient. There are a total of 25 S-REITs spanning the office, retail, healthcare, hospitality, industrial and residential sub-sectors. Examples are CapitaCommercial Trust, CapitaRetail China Trust, Ascott Residence Trust and Ascendas REIT. Maybank, which met 17 Hong Kong-based fund houses recently, said most clients view S-REITs positively as they have one of the highest yield spreads among their peers, outperforming even major REITs markets such as the United States, Australia and Japan. S-REITs were currently trading at a 2012 fiscal year yield of 6.1 percent and a yield spread of 462 basis points (bps), Maybank said, adding that many funds believe there is headroom for another 80-90 bps compression. Retail and industrial REITs appear to be the most resilient partly because retailers hold inventory and there are steady income streams backed by shopping for necessities, while industrial REITs are characterised by long lease tenures with rental escalation every year, Maybank said. 1010 (0210 GMT) (Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com) Link this Share this Digg this Email Reprints

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