Singapore REIT Distributions Face Delayed Impact from Rising Rates
Dow Jones
Yesterday
0432 GMT - Singapore REIT distributions could decline with a lag as higher rates raise finance costs for these companies, Macquarie analyst Rachel Tan says in a note. In the previous rate-increase cycle, debt costs had risen 60 basis points in FY22 and FY23, while distributions fell a year later, declining 7% over two years. Macquarie's sensitivity analysis estimates that a 50-basis-point annual rate increase could cause distributions to unitholders to decline by 2% in FY27 and 4% in FY28. CapitaLand Integrated Commercial Trust and Keppel DC REIT are among the least affected, while Keppel REIT, CDL Hospitality Trusts and CapitaLand Ascott Trust are among those at the other end of the spectrum.
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