Valuations for office Reits lag counterparts, but re-rating may face uncertainty
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OFFICE real estate investment trusts (Reits) have been some of the more unloved asset classes in the Singapore market, with the sub-sector trading at a steep discount to its book value.
Reits that derive their revenue predominantly from the office sub-sector are trading at over a 50 per cent discount to their book value on average, dragged by weakness from those with overseas assets in the US and Europe.
By comparison, the average price-to-book (P/B) ratio for the S-Reit sector is around 0.7.
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