“Although this could result in higher borrowing costs ahead, we believe the S-REITs under our coverage have continued to be prudent on their capital management. The average gearing ratio stood at 37.4%, as at Dec 31, while 74.4% of their borrowings are fixed or hedged, which would mitigate the expected increase in borrowing costs ahead,” writes the team in their March 1 report.
The team at OCBC Investment Research (OIR) says it foresees higher inflationary pressures to be a concern on the impact of margins on the Singapore REITs (S-REITs) sector.
Amid the inflationary pressures, interest rates are poised to increase further as central banks are likely to raise their benchmark rates in 2022, notes the team.
