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Good buys for Reits harder to come by with lower debt limits
Yield-accretive acquisitions tougher as equity financing is more expensive and erodes returns
Add BT as a preferred sourcePublished Tue, Mar 22, 2016 · 09:50 PM
THE recently enforced lower debt limit for real estate investment trusts (Reits) is making it harder for Reits to do yield-accretive acquisitions.
It is a chain effect.
Singapore Reits had taken advantage of the low interest rates last year to make acquisitions funded mostly by debt. This had caused many of their gearing levels to creep up.
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