Who will be next to merge in the S-Reit universe?

A critical need for scale - the driver behind the merger between OUE Commercial Reit and OUE Hospitality Trust - is likely to spur more mergers within the real estate investment trust (Reit) sector here.

Four of the biggest Reits/business trusts are constituents of the benchmark Straits Times Index (STI) and 10 have also made it to the FTSE EPRA/NAREIT Developed Asia Index.

If index inclusion is the end game, possible candidates from among the Reits to merge would be those that currently have a market value that is below S$1 billion. Still, the structure of the Reits and their respective sponsors, and the ownership of those sponsors, matter when considering the feasibility of a merger. Not any Reit can be merged with another.