Singapore Stock Market News

Singapore Office REITS - Is it time to buy the office REITs?

StockFanatic
Publish date: Tue, 15 Dec 2015, 06:07 PM
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Our view
It is not time yet. Despite a 20% share price correction for Singapore office REITs so far in 2015 (vs. a 10% decline in the FTSE STI REIT index), we are just two quarters into what should be seven quarters of rental declines. We believe actualization of declines will mean office REITs continue to underperform other Singapore REITs through 2016.

We expect office rents to fall 20% over two years. We see vacancies rising from 10% in 1Q15 to 13% by 4Q16, and rents falling 20% over that period. The depth of the down cycle would be closer to the 40-60% declines in previous cycles should we also face a global recession.
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