Rents are down, but REIT DPUs are still high. What’s going on?

SINGAPORE (Jan 6): It has undoubtedly been a rough year for commercial property. The retail sector remained under pressure from weak consumer spending, labour shortages and growing competition from e-commerce players. Meanwhile, office buildings and industrial properties were affected by oversupply and economic uncertainty.

Yet, that has not slowed down the pace of property securitisation in the past year, as investors continued to hunt for yield.

In 2016, DBS helped raise $4.3 billion for REITs alone, including three new REIT listings: Manulife US REIT, Frasers Logistics and Industrial Trust and EC World REIT. In 2015, only one REIT was listed — BHG Retail REIT - which raised $120.94 million.

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