Barclays prefers Reits with strong distribution buffer

Singapore

DON'T dump the Reits just yet. Those with generous yield spreads can still cushion against higher interest rates, set to come through in the second half of next year, a Barclays equity outlook report this week showed.

"With rental growth likely to be anaemic across the Hong Kong and Singapore rental markets, we prefer those landlords and Reits with high absolute dividend yields as the additional dividend buffer should come in handy against potentially higher interest rates," Barclays said.