Bleak outlook for S-Reits in 2014

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With investors shunning Asian markets for greener pastures offered by recovering developed markets, the prospects of Singapore-listed real estate investment trusts (S- Reits) appears gloomy in 2014, according to analysts.

Singapore Reits are also expected to face stiffer competition from its other Asian counterparts, especially Reits from developing countries. Thailand and the Philippines now have their own rules and regulations for listing Reits, while India is still finalising its framework.

“S-Reits have done well in previous years partly because there was a lack of Reit structure in regional markets. With the establishment of this framework in some countries, entities may choose to list in their home countries (instead),” said OCBC Investment Research analyst Kevin Tan.

While some experts are still hoping for new Reit listings in Singapore this year, including those with offshore assets, investors generally prefer Reits with local assets compared to those with properties in other countries.

“The market (generally) favours local Reits as they are more familiar with the assets, and need not be concerned with foreign exchange fluctuations and tax issues associated with overseas assets … although the Reits enjoy tax transparency in Singapore,” Tan added.


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