Travel, e-commerce, work culture to affect REIT outlook, says SGX Academy trainer

The EdgeProp Focus event was attended by over 100 participants (Credit:Samuel Isaac Chua/The Edge)
Increased travel, the rise of e-commerce and a change in working habits are three trends that will impact the real estate investment trust (REIT) market. This is the view of Chua I-Min, a trainer with SGX Academy, the education and training arm of the Singapore Exchange.
On the first trend, Chua believes that with more people travelling, there will be greater demand for hotels in the future, impacting hospitality-type REITs positively. “It’s more common now for people to go for short-term stays compared with a decade ago,” he said at the EdgeProp Focus event on investment options in real estate.
But Chua is not as worried about the impact of sharing economy models such as Airbnb on the global hotel industry. “It’s actually a very different target market,” he later tells EdgeProp in an interview. Business travellers and people who are used to staying at five-star hotels will not opt for Airbnb; it will attract only travellers from “a certain segment”, he says. In fact, business travellers make up a high proportion of demand for hotel stays, adds Chua.
Chua: Well-managed malls and those with clear themes will remain relevant amid e-commerce expansion (Credit: Samuel Isaac Chua/The Edge)
Noting government regulations, Chua says it is “not so straightforward” for Airbnb to disrupt the existing hospitality market. The Singapore government has always monitored the short-term rental market closely. In April, it launched a public feedback session on a new policy that will allow Airbnb-type rentals only if 80% of residents in the condominium development agree to it. The minimum lease period for short-term stays is now three months, a change from a minimum stay of six months last June. Also, two homeowners were recently fined $60,000 and jailed 12 weeks each for providing unauthorised short-term stays to guests on Airbnb.
On the second trend, Chua believes e-commerce will impact two kinds of REITs — industrial and retail. The demand for...