You are here

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.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to