SINGAPORE (April 3): CIMB Research is upgrading its sector outlook on Singapore REITs (S-REITs) from “underweight” to “overweight” on a dovish Fed outlook in addition to a potential sector re-rating ahead of a broader physical recovery in 2018.

In a report last Friday, CIMB is rotating into S-REITs after sensing the under-owned sector has appeared on the radar of investors following the Federal Open Market Committee (FOMC) March meeting, which communicated an accommodative policy.

“Given that the valuation gap between developers and SREITs has narrowed, we expect investors to take some profit from the cyclical sectors, which have done well, and find a temporary hiding in S-REITs,” said lead analyst Yeo Zhi Bin in the report.

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