SREITs to grow at low single digit rate this year: DBS

Rental rates and occupancies for Sreits to continue to show positive reversions for this year.

According to DBS, SREITs are up for a relatively benign or positive operating environment and outlook. While different sub-segments display various supply/demand dynamics, on the whole, rental rates and occupancies for Sreits are expected to continue to show positive reversions for this year. This is largely in line with DBS' projection that the sector will grow at low single digit rate this year.

Here's more from DBS:

Reiterate retail segment pick. The feedback from different participants continue to underpin our ‘positive on retail’ strategy, thanks to continued strong domestic consumption from large population catchment at major housing estates as well as the rising presence of international retail principals expanding their presence in this part of the world. In addition, asset enhancement initiatives (AEI) undertaken to improve asset efficiency, tenant mix and positioning would also be another driver for rental growth.

In the office sector, office reits expect to achieve positive rental reversion, albeit modestly, thanks to a low base and continued appetite for smaller bite size office space than previously. Forward leasing should also enable these reits to lock in decent rates. The industrial sector is also enjoying positive demand for space to date while different sub-segments such as business parks may experience volatility in terms of rental reversions owing to different renewal base.