Go on the defensive with these S-REITs next year, says OCBC

By PC Lee / The Edge Singapore | December 5, 2018 3:03 PM SGT
SINGAPORE (Dec 4): OCBC Investment Research expects Singapore REITs (S-REITs) to record positive DPU growth next year. For those under its coverage, OCBC is projecting growth of 0.3% for FY19F and 2.4% for FY20F.
In terms of sub-sector preference, OCBC prefers retail REITs, followed by industrial REITs, hospitality REITs and office REITs.“Heading into 2019, we maintain ‘neutral’ on S-REITs, but with a bias to the upside,” says OCBC lead analyst Andy Wong Teck Ching in a Monday report. While near-term supply pressures is forecast to be highest for retail, OCBC expects retail REITs under its coverage to remain resilient.
To recap, the recently concluded 3QCY18 results season saw 18 out of the 22 S-REITs under OCBC’s coverage report results which met expectations, while four fell short. Average DPU growth was flat y-o-y, but an improvement compared to -0.8% y-o-y in 2QCY18 and -2.6% y-o-y in 1QCY18.
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