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Softer earnings expected for S-reits in first half, with funding cost among headwinds

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Raphael Lim

Raphael Lim

Published Mon, Jul 17, 2023 · 05:00 AM
    • DBS analysts expect most S-Reits to be able to keep earnings above three times interest expense. The exception would be office and US office S-Reits, which have higher leverage ratios.
    • DBS analysts expect most S-Reits to be able to keep earnings above three times interest expense. The exception would be office and US office S-Reits, which have higher leverage ratios. PHOTO: ST FILE

    ANALYSTS are expecting muted results from Singapore-listed real estate investment trusts (S-Reits) for the first half of 2023. High interest rates and a strong Singapore dollar are among the potential drags on their performance.

    Key metrics to watch include property valuations as well as how individual Reits are coping with interest cost pressures and refinancing.

    “Overall, we expect a soft earnings report for H1 2023 for the majority of the S-Reits, with the exception of a few in the industrial, healthcare and office/retail sector,” said RHB analyst Vijay Natarajan, who expects many Reits to report lower distributions per unit (DPUs).

    S-ReitsFinancial resultsSpotlight

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