Hunting for yield? DBS analysts betting on S-Reits over bank dividends
Yield gap between both is widening, but rising bond yields and interest rates bear watching
Singapore analysts are advising investors to consider S-Reits over bank dividends, as the yield gap between the two sectors has expanded to a multi-year high. S-Reits now yield around 6.2% in dividends, compared to about 4% for local banks DBS, OCBC, and UOB. DBS Research Group notes that small and mid-cap S-Reits have outperformed large-cap peers, delivering a stronger distribution per unit (DPU) growth of around 5% year-on-year in the first half.
This growth is expected to accelerate by 4% in the second half of the year, compared to just 1% for large-cap S-Reits. Analysts favor office S-Reits due to low vacancy rates and strong rental reversions, followed by industrial and retail assets. They also identify value-unlocking opportunities in certain S-Reits, such as Suntec Reit, which may benefit from its upcoming strategic review.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- Hunting for yield? S-Reits may offer more than banks, say DBS analysts businesstimes.com.sg
