S-Reits may be in for near-zero total returns until end-16: OCBC
Research report urges caution, citing harsh impact of rising interest rates and falling distribution growth
Singapore
OCBC Investment Research released a controversial report on Tuesday urging real estate investment trust (Reit) investors to reallocate their capital as they may reap almost zero total returns from now until end-2016. Much worse, they may even suffer a rapid initial capital loss as prices fall, before subsequently recovering to par on dividend gains.
This comes as its in-depth quantitative analyses illustrate the harsh impact of rising interest rates and declining distribution per unit (DPU) growth. This has turned the risk-reward of the Singapore Reit (S-Reit) sector unfavourable, it said.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Porsche posts Q1 profit drop on ramp-up costs
IBM plots US$730 million expansion of Canadian semiconductor site
Seatrium unit to fully redeem S$500 million worth of floating-rate bonds early
Yeo Guat Kwang, John Chen retiring from corporate boards
US: Wall St opens higher
Air China orders homegrown C919s in challenge to jet duopoly