REITs to boost property sector

The property market is expected to see demand rise over the next 12 months from deep-pocketed institutional buyers such as real estate investment trusts (REITs), which are starting to see more value in the local marketplace, analysts say.

More REIT listings are also likely to spur acquisitions here. The proposed listing of Ascendas Hospitality Trust is set to be Singapore’s largest initial public offering this year, targeting between S$770 million and S$823 million. And experts say more of such REIT listings are to come.

With revenue per available room forecast to increase due to a supply shortage, hospitality REITs with Singapore assets will be attractive to investors.

“They will be successful as long as they can acquire several anchor Singapore properties,” said Mr John Stinson, Managing Director of Capital Markets, Asia-Pacific, Cushman & Wakefield.

“It’s a good time for REITs to be acquiring properties. In the next 12 months, the very successful, the larger REITs will grow in size. As they grow in size, they will rationalise their small properties.”

At its property prospects seminar yesterday, the Real Estate Developers’ Association of Singapore (REDAS) noted that the additional buyer’s stamp duty has brought about new trends in the non-residential property market.

Record transactions have been made for industrial property recently, while the retail property sector also performed strongly, it said.

Source : Today – 13 Jul 2012

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