Macquarie bearish on Singapore, other Asian Reits

Singapore

THE asset management arm of Macquarie Bank has been "underweight" on Asian real estate investment trusts (Reits), and will continue to be so until there is some stability in China's economy.

In the meantime, low valuations of Reits and real estate oversupply in Singapore may mean that some takeovers and mergers may occur in the sector this year, Bob Zenouzi, chief investment officer, real estate securities and income solutions, at Macquarie Investment Management told The Business Times.

"It may already be happening as we speak," he said, referring to reports of at least four parties expressing interest to buy Ascendas Hospitality Trust.

Mr Zenouzi is pessimistic on all four major Reit markets in the Asia-Pacific - Singapore, Hong Kong, Japan and Australia. China's slowdown has had a flow-on effect in these countries, he said. For example, tourist numbers have fallen, which affects retail sales. In January, British trenchcoat maker Burberry said its Hon…