Can small developers brave the tide of volatile local bond market?

Large players could fare better with the uncertainties.

The dominance of large players in Singapore's real-estate industry should be able to provide cushion to absorb downside risk in the domestic bond market, but small developers may come under pressure than their larger peers.

According to a report by S&P Global Ratings, leverage among Singaporean developers is very high but for smaller players, the threat could very much pressure them

"Smaller developers are more at risk of financial distress than larger peers, given weak liquidity, limited financial flexibility, and narrow business models," the report said.

The report added, "Access to funding will be the key default differentiator for these developers in this uncertain market.”

Real estate investment trusts (REITs) could better fare well in market uncertainties given their stable cash flows and high proportion of unencumbered assets.

The study noted that real estate developers and REITs account for 52% of an estimated $60 billion in total bonds outstanding issued by Singapore-listed entities.

This would help the whole sector stay resilient with the current volatility in the market.