REITs Center

The impact of the pandemic has been pervasive with economic dislocations now reverberating across the world, hitting consumption, tourism, and supply chains. Financial market volatility has also increased with equity prices dragged lower through 2020. While REITs have not been spared in the current selloff, the recent price drops have upped the distribution yields of the region’s REITs, which rose to 4.4% in February, from 4.0% in January, according to the GPR/APREA Composite REIT Index. Yields for Singapore REITs rose 0.3 percentage points to 5.3% in the same period.

• The impact of the pandemic has been pervasive with economic dislocations now reverberating across the world, hitting consumption, tourism, and supply chains. Financial market volatility has also increased with equity prices dragged lower through 2020.
• While REITs have not been spared in the current selloff, the recent price drops have upped the distribution yields of the region’s REITs, which rose to 4.4% in February, from 4.0% in January, according to the GPR/APREA Composite REIT Index.
• Historically, returns for REITs have demonstrated lower volatility over the longer term, supported by their stable dividend pay-outs. The main reason is that the overall performance, especially for office and industrial, is tied to relatively long-term leases.

SEBI rolled out REIT Regulations in September 2014 (“REIT Regulations”). Of the Grade A office space stock of over 500 msf in India, as per JLL Research, 294 mn sq. ft. of office space stock would be eligible for REIT in India. This would translate to potential investment of USD 35 bn.

• The number and value of raisings in Australia has already exceeded what took place in the aftermath of the 2008-09 global financial crisis.
• Singapore has seen transactional activity and liquidity rise in the last two years, and an increase in cross-border activity has compressed yields.