S-Reits expected to report muted performance this earnings season as interest costs stay high

SINGAPORE-LISTED real estate investment trusts (S-Reits) may have enjoyed a strong rally towards the end of 2023 as peaking interest rates lifted investor confidence, but analysts are expecting subdued performance from the sector for the period ended December.

Market watchers warned that interest costs are still likely to trend upwards and weigh on distributions in this results reporting season, and urged investors to keep an eye on S-Reits’ balance sheets amid expectations of portfolio valuation declines.

“Overall sector performance is expected to be subdued in terms of distribution per unit (DPU) growth, given the continued drag from higher interest rates,” said head of OCBC investment research Carmen Lee.