Thursday, December 26, 2013

S-REITS -Time To Accumulate S-REITs (DMG)

S-REITS -Time To Accumulate S-REITs

Since late May 2013 when fears of global interest rate tightening spooked capital markets worldwide, the S-REITs sector has collapsed by over 20%, underperforming the wider FSSTI index (down by 10%). We think the selldown has overly discounted both the macro and  REITspecific fundamentals, hence we believe it is an opportune time to buy ahead of consensus upgrades. Maintain BUYs on Keppel-REIT, AIMS AMP, Cambridge and Cache Logistics.

¨ The SREITs under our coverage are currently trading at 6.5% FY14F DPU yields, with almost 3.5% spread over Singapore’s 10-year bond yield (historical average 4.6%). This is on the back of a 20% correction in the SREITs since May, against the wider FSSTI index which retraced by only 10%.


¨ Our fixed income team forecasts only a 66bps rise in US’ 10-year bond yield over the next 12 months, which is expected to push up Singapore rates, with +17bps for 2-year government bond yield and +55bps for 10-year yield by end-2014F. We estimate 3-5% earnings impact on the S-REITs, assuming a 100bps rise in financing costs, which will more than fully account for the rate hikes projected by our fixed income team.

¨ Current valuations suggest that the commercial office and industrial sectors are the most attractive in our view, given the low forward supply stock vis-à-vis the mid-cycle demand, which will continue to underpin a positive upcycle rental reversion. New office supply is expected outpace historical average demand, with new industrial supply through 2016F having reached 71% pre-commitment.

¨ We remain lacklustre on the hospitality REITs with new supply coming onstream (5.9% CAGR until 2015F) and the recent foreign worker riots, which could arrest visitor arrivals (historical growth of 6.7%). However, its low valuations offer limited downside risks at this juncture. In the absence of strong tourism arrivals, suburban malls are expected to outperform prime retail malls, as Singapore’s retail space per capita is still among the lowest in developed Asia-Pacific.




Source/Extract/Excerpts/来源/转贴/摘录: DMG-Research,
Publish date: 23/12/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock