Reits in S'pore to consolidate in next 12-24 months: report

Reits under the same sponsor are the likeliest candidates, as they seek cost synergies in tougher fee income and limited growth environment, says Morgan Stanley

Published Wed, Jul 1, 2015 · 09:50 PM

Morgan Stanley

Singapore

SINGAPORE real estate investment trusts (Reits) are due for consolidation in the next 12-24 months, a Morgan Stanley report this week said, disagreeing with the consensus view The Business Times earlier had reported.

Such merger-and-acquisition (M&A) activity will likely be undertaken to realise cost synergies in a tougher fee income environment as new rules from the Monetary Authority of Singapore (MAS) kick in soon, Morgan Stanley said.

Even if this doesn't happen immediately, the house believes that consolidation is unavoidable, and necessary even, to develop sufficient scale and stock liquidity for individual Reits to compete effectively with global peers.

Consolidation, it says, could be an alternative source of growth as expansion opportunities from acquiring unsecuritised real estate in S…

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