Paragon deal: Why investors should get ready for more Reit mergers and take-private offers
In a less-conducive operating backdrop, smaller Reits may be weeded out, as larger ones play the role of consolidators
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THE most prosaic observation about the purchase of Paragon by CapitaLand Integrated Commercial Trust (CICT) from Cuscaden Peak may also be the most profound: Among real estate investment trusts (Reits), the biggest players have an unbeatable advantage when it comes to acquiring assets and enhancing them.
So, perhaps investors should get ready for more take-private deals, and another spate of mergers.
With elevated inflation and interest rates weighing on yield-oriented investments and the ongoing rejuvenation of the broader Singapore market, investors will probably become less enamoured with all but the largest Reits that are exposed to the most resilient asset classes.
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