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S-Reits more leveraged but still cautious in taking up new debt obligations: IREUS

Some trusts have already lowered their leverage by Q2 this year; hospitality names chalk up some of the largest jumps in FY2020 debt ratios

Fiona Lam

Published Fri, Sep 3, 2021 · 05:50 AM

S-Reits

Singapore

THE average debt ratios of Singapore-listed real estate investment trusts (S-Reits) went up amid the Covid-19 pandemic, with those in the hospitality sectors clocking some of the biggest increases.

Nonetheless, S-Reits remained disciplined in taking up new debt obligations, and some had already lowered their leverage by Q2 this year, according to the Institute of Real Estate and Urban Studies' (IREUS) analysis of data from S&P Capital IQ Pro.

"Despite having greater leeway to raise debt, most S-Reits kept their leverage ratios below 45 per cent in FY2020," said Lee Nai Jia, deputy director of IREUS at the National University of Singapore.

Last April, the Monetary Authority of Singapore raised the leverage limit for S-Reits to 50 per cent, from 45 per cent, to offer them more flexibility to manage their capital structures amid the challenging en…