Singapore's market keeps churning out new REIT (real estate investment trust) listings, but with interest rates headed higher and the trusts' asset sizes getting smaller, is there much value to be had?
OUE Commercial Trust appears set to become the latest addition to the city-state's stable of listed real-estate trusts, filing its prospectus with the Singapore Exchange on Friday.
But like some of its more-recently listed peers, the trust won't have many assets – it's starting with just two office towers, one in Singapore and one in Shanghai.
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"The size is a bit of an issue. There are too many small REITs which are struggling to differentiate themselves," noted Tim Gibson, head of property equities for Asia at Henderson Global Investors.
At the IPO price of 80 Singapore cents a share, or around 63 U.S. cents each, the market capitalization will be less than 700 million Singapore dollars, compared with the total market cap of around 55 billion Singapore dollars for the Singapore REIT sector's around 30 listed trusts.
"This will be the smallest of the four office REITs" already listed in Singapore, noted Ong Kian Lin, an analyst at Maybank-Kim Eng.