Brokers' take

Property | Overweight

UOB Kay Hian, Jan 5

The impact of the interest rate hike on Singapore real estate investment trust (Reit) distributions is minimal in the near term (0.4-4.6 per cent drop in distribution per unit (DPU) for a 100-basis point rise) due to the long debt maturity period and high proportion of fixed-rate debt. Even the punitive case of refinancing of total outstanding debt due outright (5.5-12.3 per cent drop in DPU for a 100-basis point rise) has been more than priced in by the market. We remain 'Overweight', preferring deep value and diversified Reits, with Ascott Residence Trust, CapitaLand Commercial Trust and Mapletree Logistics Trust as our top picks.