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Broker's take: BNP Paribas sees opportunities in S-Reits
WITH the rollback in expectations over an interest-rate hike this year, there are investment opportunities in Singapore Reits (S-Reits), said BNP Paribas in a brokerage report.
"A pause in rate-hike cycle could boost near-term S-Reit sentiments," the report on Tuesday said.
The bank's base case is for no further rate hikes in 2016 and 2017. At current levels, the S-Reits trade at an attractive dividend yield of about 7.5 per cent, on average.
The bank prefers S-Reits with exposure to retail in suburban areas, given moderate supply pipeline, and best track record of distribution per unit growth through cycles. It has a "buy" rating on Frasers Commercial Trust and Mapletree Logistics Trust, and cautious on offices and hotels.