Are S-Reits with exposure to Europe safe from Euro depreciation?

UOBKayHian advises to maintain buy for six Reits whilst hold for one Reit.

The Euro was hit by the Russian-Ukraine unrest, which includes its value being depreciated against US dollar and Singapore dollar.

With this continued crisis, is it still worth it to invest in real estate investment trusts (Reits) that have exposure to European markets?

In a brokerage report, UOBKayHian said Reits with exposure to Europe have set off panic selling to address the financial turmoil. 

“Heightened risk aversion has spilled over to the broader S-REITs market. Recent panic selling has brought valuations for S-REITs to attractive levels and bargains have emerged,” the analyst explained.

READ: Analyst cites factors to boost Industrial Reits value

UOBKayHian has identified some Reits with exposure to the UK that posted valuations whilst others are beneficiaries of the potential recovery in Europe.

Amongst the Reits which UOBKayHian maintained its buy call are CapitaLand Ascendas REIT, CapitaLand Ascott Trust, CDL Hospitality Trusts, Elite Commercial REIT, Frasers Logistics & Commercial Trust, and Lendlease Global Commercial REIT.

UOBKayHian only initiated a hold call for Suntec REIT, which it said has “strongest recovery at West End.” 

“The recovery in take-up for office space in the past 12 months was broad-based but was strongest for the West End at 24% above the 10-year average,” it said.

The target price for Suntec is at $1.57.