Reit benchmarks seen pulling up rents elsewhere

[SINGAPORE] The argument that real estate investment trusts (Reits) are responsible for hiking up retail rents is often made, but the more difficult part is to say how.

Statistics show that Reits do not own the bulk of retail space here, debunking the common perception that they are market leaders in an oligopolic structure. Neither do they hold a majority of the prime malls, so the idea that their ownership of the highest-demand locations gives them pricing power doesn't quite hold.

Property consultants say the likely explanation then is simply that other landlords are benchmarking their rates to Reits, given the market transparency that the listed Reits practise - an effect they called "herding".