Buy these REITs as Singapore eases Covid measures further, says major Asian bank

Published Wed, Dec 16 20207:37 PM EST

(This story is for CNBC PRO subscribers only.) SINGAPORE — Singapore plans to further relax Covid-related curbs in the coming weeks — that could boost share prices of several real estate investment trusts listed in the city-state, said the country's second-largest bank. "We view these latest developments as a huge positive, as the roadmap to recovery and return to normalcy appears more visible now, although the journey ahead is likely to remain bumpy," OCBC Investment Research said in a Tuesday report. Earlier this week, Singapore's Prime Minister Lee Hsien Loong announced that limits on public gatherings will be loosened starting Dec. 28. The country has also approved Pfizer and BioNTech's coronavirus vaccine and is expecting the first shipment this month, said Lee. OCBC said further opening of the Singapore economy would boost valuations of REITs in the retail space, and to a smaller extent those in the hospitality sector. The bank recommends four REITs it expects to do well in the near term: CapitaLand Integrated Commercial Trust , Frasers Centrepoint Trust , Mapletree North Asia Commercial Trust and Ascott Residence Trust . On the other hand, some Singapore-listed REITs could come under selling pressure as investors rotate into value stocks that benefit from an economic recovery, said OCBC. That's especially the case for REITs that have outperformed in the pandemic, the bank added. But OCBC sees such a pullback in share prices as an opportunity for investors with a longer-term investment horizon to buy into five other REITs: Ascendas REIT , Keppel DC REIT , Frasers Logistics and Commercial Trust , Mapletree Industrial Trust and Manulife U.S. REIT . Singapore economy The Singapore government has spent billions to support its economy from the pandemic-induced downturn. Prime Minister Lee said on Monday that the government has set aside more than 1 billion Singapore dollars ($750.9 million) to buy coronavirus vaccines, and expects to have enough shots for everyone in the country by the third quarter of 2021. New local Covid cases in Singapore have slowed to a trickle in the last two months. As of Wednesday, the Southeast Asian city-state has reported a total of more than 58,000 cases and 29 deaths, health ministry data showed. The slowdown in new infections and gradual lifting of measures to contain the virus spread have helped to improve Singapore's economic prospects. But the economy is still expected to shrink between 6% and 6.5% this year — which would be the country's worst recession on record, according to official statistics.

People wearing protective masks prepare entering a mall at Singapore's shopping district Orchard Road.

Suhaimi Abdullah | Getty Images News | Getty Images

(This story is for CNBC PRO subscribers only.)

SINGAPORE — Singapore plans to further relax Covid-related curbs in the coming weeks — that could boost share prices of several real estate investment trusts listed in the city-state, said the country's second-largest bank.

"We view these latest developments as a huge positive, as the roadmap to recovery and return to normalcy appears more visible now, although the journey ahead is likely to remain bumpy," OCBC Investment Research said in a Tuesday report.

Earlier this week, Singapore's Prime Minister Lee Hsien Loong announced that limits on public gatherings will be loosened starting Dec. 28. The country has also approved Pfizer and BioNTech's coronavirus vaccine and is expecting the first shipment this month, said Lee.