In August, the Singapore REITs Index (FSTREI) declined by 4.6% m-o-m, underperforming the benchmark Straits Times Index (STI), which rose 0.3% m-o-m in the same month. The decline came mainly after Fed chairman Jerome Powell repeated his hawkish stance during the annual central bank symposium at Jackson Hole towards the end of August, in a bid to reduce inflation rates back to below 2%.
DBS Group Research analysts Geraldine Wong and Derek Tan are indicating their preference for higher yielding Singapore REIT (S-REIT) plays and inflation-hedged REITs as the US Federal Reserve (US Fed) reiterates its hawkish stance.
“Winning sectors for the quarter included the hospitality sector, which rose 0.2% m-o-m, followed by the European office sector (-1.8% m-o-m) and US hospitality sector (-2.1% m-o-m),” the analysts note in their Sept 5 report.
