More REIT mergers lie ahead as growth prospects dry up

Fresh property news selection on December 06. 2019, Friday.

Today's news selection contains the latest real estate related stories. Do you own a real estate/property/finance blog or news site? Send the URL to news@agent.sg so our editors can use them as sources.


Frasers is one of the recent casualties after the merger of its logistics and commercial trusts.

The consolidation amongst real estate investment trusts (REITs), especially between firms with the same sponsor, are expected to continue given a limited potential for organic growth and the benefits in having a larger assets under management (AUM), according to a report by Jefferies.

The report stated that a bigger size allows them greater financial flexibility to undertake larger projects, compete for acquisitions and more easily withstand economic downturns, as it allows them with increased development limits and greater financial flexibility.

“Asynchronous cycles of different geographies and property sub-sectors along with lower tenant concentration risk is likely to cushion distributions from idiosyncratic risks,” equity analyst Krishna Guha said.

It will also provide them better odds to be included to indices, which will improve their liquidity, diversify their share ownership and lower their capital costs.

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