S-Reit DPUs weighed down by higher interest rates in H1, but tide to turn in H2

HIGHER interest rates and financing costs remained “the biggest villains” for Singapore-listed real estate investment trusts, or S-Reits, weighing down on their distributions in the first half of 2024. However, interest rate cuts, which appear to be increasingly likely, will “turn the tide” for S-Reits in the second half of this year, said market watchers.

Distributable income and distribution per unit (DPU) continued to fall for the majority of S-Reits in the latest reporting season. Out of the 36 S-Reits and property trusts that disclosed their financial information in the latest earnings season for the period ended June, 26 posted lower distributions, while 29 reported lower DPUs, data compiled by The Business Times showed.

Performance was mixed when it came to revenue growth, with an even split between those who posted higher revenue growth and those that did not.