The number of Real Estate Investment Trusts (REITs) in Asia is expected to swell over the coming 3 to 4 years according to HSBC because of increasing demand for investments in more risk disinclined properties.
REITs invest in commercial properties mainly and pay rent collected from their properties to shareholders as dividend. This is why some investors see them as safer investments than property stocks.
Another advantage is that they usually offer returns that are higher than yields of government bonds.
The increased activity in the REIT IPO market this year especially in the Asian continent is due to successful listing of Cache Logistics Trust in Singapore. Also Sunway City plans to list its REIT in Malaysia come July.
At the Reuters Global Real Estate and Infrastructure Summit which was held today, Managing Director and Head of Real Estate Advisory for Asia Pacific at HSBC, Mr. Jason Kern had to say,
“I see proliferation of REITs, absolutely. I think we’ll have twice as many REITs in Asia as we do today in the next three or four years.”
He anticipates Singapore to witness most of the activity with more than 20 to be listed there in the coming years from companies all across Asia. It already has more than 20 listed REITs such as Fortune, Saizen from Hong Kong and Ascends from India. Australia and Malaysia are also showing growth patterns.
Kern further added, “What I find in my space is that investors are more risk-averse for sure. They are more defensive. We actually still find very strong demand at the most defensive end of the spectrum, which are the REITS.”
This Trend is only to bring fortune to our Country as well.