Retail Reits facing a bump in the road - for now

THE tougher safe-distancing measures announced earlier this month are a disappointing but possibly temporary setback for Singapore's retail Reits, some of which have been touted as post-pandemic "reopening" plays over the last few months.

Although Singapore's borders still remain largely shut to tourists, domestic demand has helped to keep cash registers ringing. In the second consecutive month of growth, retail sales for March increased 6.2 per cent year-on-year, partly due to a low base. On a month-on-month (seasonally adjusted) basis, retail sales were 3 per cent higher.

The latest restrictions, which are a softer version of last year's "circuit breaker" and will remain in place until June 13, are likely to interrupt this recovery. This, in turn, could further weigh on investor sentiment towards Reits, which were already grappling with concerns over inflation and rising bond yields, analysts have pointed out.