Step up efforts to grow the Reit sector or more could follow Paragon Reit to head for the exit

IF INTEREST rates do not fall much further, equity fund-raising in the Singapore-listed real estate investment trusts (Reits) space could be muted.

Reits are sensitive to interest rates as higher borrowing costs affect distributions by Reits, and yield-driven investors flock to Reits when interest rates are low.

Also, investors today may be highly selective in supporting Reit equity fund-raising and prefer trusts to finance new acquisitions by selling existing assets.