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REITs holding foreign assets gaining traction on higher yields, good growth

Goola Warden Published on Wed, Jun 21, 2017 / 4:40 PM GMT+8

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This article appears in Issue 784 (June 19) of The Edge Singapore which is on sale now

SINGAPORE (June 21): Real estate investment trusts holding foreign assets have traditionally struggled to develop a following in the local market, partly because their assets and sponsors are unfamiliar. As US interest rates rise, however, the relatively high yields and globaloriented growth prospects offered by this segment of the REIT market could become interesting to local investors. That is especially so amid growing concerns about declining shopper traffic at local malls, and turmoil at several REITs that hold industrial properties in Singapore.

There are currently 10 REITs holding only foreign assets listed on the Singapore Exchange — excluding First REIT, which was listed with an initial portfolio of only foreign assets before buying and then selling some nursing homes in Singapore. Of these 10 REITs, six have foreign sponsors: First REIT, IREIT Global, BHG Retail REIT, Lippo Malls Indonesia Retail Trust, EC World REIT and Manulife US REIT. The four with local sponsors are CapitaLand Retail China Trust, Fortune REIT, Frasers Logistics & Industrial Trust (FLT) and Mapletree Greater China Commercial Trust.