Assets in the UK were among the first to experience cap rate expansion but have since stabilised, while assets in Europe and Australia have seen cap rate expansion pick up in FY2023, the analysts note.
DBS Group Research analysts Dale Lai and Derek Tan believe that industrial Singapore REITs (S-REITs) with Australia, the UK and European exposure are unjustifiably sold off.
In their Oct 12 report, the analysts point out that REITs with assets in the three markets have generally reported some valuation declines over the past 18 months due mainly to cap rate expansions.
