It is the rental portion that now concerns the analysts at JP Morgan. “We see vacancy risk as the key focus into 1Q2023 on the back of growth concerns and real estate headwinds,” the JP Morgan analysts state in a report dated April 13.
There are many aspects to valuing a REIT, in particular an externally managed REIT such as the S-REIT universe. The interest rate parts - interest expense, capital values, discount rates, discounted cash flows and yield spread - are a primary focus during the current interest rate cycle.
Then there are rents which many investors would view as paramount to their investment. After all, without rents, no distributions per unit (DPU) are likely.
