“Acquisition growth should be lower given higher cost of capital, and we prefer REITs to divest/recycle capital. Reopening drives hospitality, while bottom-up drivers (such as asset enhancement initiative completions) support retail. We see slowest DPU growth for industrial/office,” they explain.
Despite improving rent reversions and rise in service charges, Credit Suisse expects most Singapore REITs (S-REITs) to see slower or declining DPU in 2023.
In their unrated sector report, analysts Nicholas Teh and Louis Chua expect 8% to 10% reversions for office, -1% to 3% for retail and 2% to 3% for industrial S-REITs. However, revenue growth will be gradual and higher costs will come through faster, resulting in slower DPU growth.
