Risks to rise for Singapore Reits in 2016; more M&As likely: Fitch
RISKS for Singapore's real estate investment trusts (S-Reits) will rise in 2016, said Fitch Ratings in a report on Monday, in view of weak economic fundamentals and new supply that will be added into most sectors.
The ratings agency said it expects S-Reits with stronger balance sheets to become more acquisitive in 2016 as they try to boost earnings growth by capitalising on lower asset valuations. Sector leverage (defined as debt/total assets) is likely to increase in 2016 as a result.
Specifically, Fitch said it expects hospitality S-Reits' earnings to continue declining, but at a slower pace. Meanwhile, pressure on industrial S-Reits' earnings will increase in 2016 due to the weak global economic climate. It added that it expects the strong performance of healthcare S-Reits to continue in 2016, supported by robust demand for their services and an ageing population in Asia.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
US mortgage rates jump above 7% for the first time this year
Far East Shopping Centre back on market at unchanged S$928 million asking price
London mansions sold at 30% discount spell gloom for luxury market
Delfi Orchard up for collective sale at S$438 million guide price
US existing home sales drop in March; median price increases
German home building permits tumble 18% in February, extending rout