International Finance
Real Estate

Singapore reits in record year of M&A deals

Singapore Reits
Singapore’s reits are expected to produce 12% to 15% returns next year

Singapore’s real estate investment trusts (Reits) have spent $16.9 billion to purchase assets this year, according to Business Times. Singapore’s real estate sector has also raised a significant amount in share sales, with an 18 percent gain in the FTSE Singapore Reits index.

Jin Rui Oh, a Singapore-based director at United First Partners, told the media that, “Reits are going to be a go-to sector for the next year as consolidation will add another reason to buy alongside yields.” 

According to Oh, Singapore’s Reits will produce  12 percent to 15 percent returns next year. Investors will continue to seek opportunities in Reits as global banks cut  interest rates. This has already resulted in more than $12 trillion negative-yielding debt. 

This year, CapitalLand spent $6 billion to purchase two real estate units from Temasek. CapitalLand is one of Asia’s largest real estate companies, headquartered in Singapore. 

Also, Frasers Logistics and Industrial Trust has agreed to purchase Frasers Commercial Trust for $1.1 billion, Bloomberg reported. In total, Frasers Group will have nearly $5.7 billion in assets, becoming one among Singapore’s top 10 Reits. Logistics and industrial property comprise 65 percent of the firm’s portfolio, and the rest consists of commercial, office space, and business parks. The talks for the deal took place in January when CapitalLand signed the $6 billion deal with Temasek.

Last month, Quartz Capital Management in an open letter said that Sabana Shari’ah Compliant Industrial REIT and ESR-REIT should merge due to the overlapping investment issues between both trusts. 

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