SREITs Investment Snapshot

CSOP AML
09-17

Why SREITs?

  • Stable and High Yield:

    SREITs offers a yield of 4 to 7%,  higher than deposit rates, broad equity market dividend yield, as well as REITs in major markets

  • Lower Volatility and Correlation:

    SREITs have a moderate correlation to both stocks and bonds, and at lower volatility

  • Hedge against inflation:

    Inflation leads to higher rents, which is positive for SREITs

  • Diversification Benefits:

    SREITs offer exposure to real estate, across a wide range of sub-sectors and geography.

  • Tax Benefits:

    Individual SREIT ETF investors enjoy a tax-exempt distribution on taxable income *

Why Now?

  • Peaking Interest Rates:

    Interest rates are peaking as inflation is easing, and the next move is likely rate cuts. SREITs’ cost of debt is closer to market rates and the erosion of distributions will soon fade. SGD and overseas income stabilizing as inflation eases

  • Utilities and wage costs easing

  • Strong rent reversions across all sub-sectors:

    High single digits to teens rent reversions underpin income

  • Singapore supply and demand well balanced, and economic growth is troughing

  • SREITs’ gearing stable with less risk of equity raising vs GFC on accretive divestments

What Risks?

  • Recession:

    A soft landing is the base case, but in the event of a hard landing, SREITs are better insulated and priced than other REIT markets given the reasons listed on above in “Why Now?”

  • Equity Raisings:

    Gearing at 39% is comfortable, and more so given the proposed higher gearing limit. Some SREITs may want to retain the optionality to increase debt headroom and may raise equity closer to book value.

Source: Shorea Advisors, Bloomberg, past performance is not indicative of future performance

$CSOP S-REITs INDEX ETF(SRT.SI)$ * Tax exemption may not be applicable to all investors, refer to the prospectus for the full details. Investors should consult their own tax advisers concerning the tax treatment in their particular situation.

 Disclaimers

“The above is intended for general information purposes only. This material and the information contained in this material shall not be regarded as an offer or solicitation of business in any jurisdiction to any person to whom it is unlawful to offer or solicit business in such jurisdictions. This document is not to be construed as recommendations to buy/sell any above-mentioned securities, or any securities in the above-mentioned sectors or jurisdictions.

 CSOP Asset Management Pte. Ltd. (“CSOP”) believes that information in this document is based upon sources that are believed to be accurate, complete and reliable. However, CSOP does not warrant the accuracy, reliability, timeliness, completeness or reasonableness, and CSOP and any of its affiliates shall not be liable for any loss, damage or expense incurred directly or indirectly by any recipient and/or its controlling shareholder as a result of the use of and/or reliance on this information.

 This above may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, and estimates of yields or returns. The opinions expressed in this document only reflect the judgment of CSOP on the date of preparation of the material, and may be changed at any time due to subsequent changes in circumstances without prior notice. CSOP is under no obligation to keep the information up-to-date. The information herein shall not be disclosed, used or disseminated, in whole or part, and shall not be reproduced, copied or made available to others without the written consent of CSOP.

Advice should be sought from a financial adviser regarding the suitability of the investment and/or investment product before making an investment. Investment involves risk. The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not necessarily indicative of future performance. Investor should read the prospectus and product highlights sheet, which can be obtained on CSOP website or authorized participating dealers, before deciding whether to invest. Investors should consult their own tax advisers concerning the tax treatment in their particular situation. This above is not applicable in jurisdictions where the distribution of this material is restricted. This document has not been reviewed by the Monetary Authority of Singapore.”

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • YueShan
    09-18
    YueShan
    Good⭐️⭐️⭐️
Leave a comment
1
6