Experts say room for 2-5 more REITs in S’pore in next 2 years

Experts have said there is room for another two to five real estate investment trusts (REITs) in Singapore in the next two years.

These are likely to be large cap domestic REITs similar to listed ones like CapitaMall Trust and A-Reit.

While not giving any specifics, experts attending the annual CapitaLand International Forum also said there may also be more obstacles in creating these REITs.

Anthony Ryan, managing director, head of real estate, Investment Banking Asia, J.P.Morgan, said: “It would need to start very big…it would need to start with a manager with a good track record and experience. That is a lot harder than when the market first started.”

Observers also note that while the sector may grow, there may also be consolidation among existing REITs in Singapore.

They also said that REITs may not be a defensive financial instrument as they used to be, but they could become value-added players now that prices have been significantly depressed.

On the regional front, industry watchers said REITs are expected to put out more products in the next few years.

This will give developers a way to tap the capital markets.

Source : Channel NewsAsia – 11 Sep 2009

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