DBS: Singapore REIT sector may benefit from risk appetite.

Analysts at DBS Group Research Department stated in a report that Singapore Real Estate Investment Trusts (REITs) may benefit from risk appetite. The sector is currently valued at around 0.9 times price-to-book ratio, and during past economic downturns, the sector's price-to-book ratio bottomed out at around 0.8 to 0.85 times, indicating that a significant level of macro risks has been already priced in. They pointed out that Singapore REITs generally still offer attractive spreads compared to the yield of Singapore 10-year government bonds. The sector seems to be in a more favorable position structurally compared to the 2022-2024 rate hiking cycle, although these analysts believe that rising utility costs may have some second-order effects on returns. The sub-sectors that DBS Group is optimistic about are office, industrial, retail, and hotel.