Sharing of rent liabilities will hit office, industrial Reits more

Singapore

THE government's mandate for landlords to help small- and medium-sized enterprise (SME) tenants out with rentals is a "slight negative" for retail Reits, most analysts say. This is because most landlords have already dished out a month or more in rental relief to tenants.

A new Bill, to be introduced next week, will require landlords to provide rental waivers to SME tenants that have "suffered a significant revenue drop in the past few months". Until more details on how many tenants will be eligible for this, analysts recommend that investors stick with liquid, large-cap Reits that have strong sponsors and healthy balance sheets. Deeply discounted Reits that have already priced in negative news are also worth a look, they say.