Asia Pacific REITs to emerge victorious as economies reopen, says Goldman Sachs

Analysts discuss why the region is poised to outperform the broader market

As economies reopen across Asia Pacific, real estate investment trusts (REITs) are expected to surpass the overall market on their dividend prospects, reported The Star, citing Goldman Sachs’ forecast.

The firm’s analysts revealed that the greater visibility, along with “relative stability” of dividends in the REIT segment has enabled the stocks to exceed the broader market throughout the cycle of slow economic growth and price cuts.

Since the region has started to gradually resume business activities, they said the rental income is a certainty.

More: The Philippines finds REIT timing for property investment

Furthermore, the lockdowns enforced across the globe has substantially affected commercial property companies. The S&P Asia Pacific REIT Index, which currently has a dividend yield of around five percent, has dropped to 19 percent year to date. This means three times the loss in the broader measure for regional stocks.

Goldman Sachs’ scoring rated Australia and Singapore REITs as the highest in Asia Pacific when it comes to recovery post-pandemic, while Hong Kong ranked the lowest. On the other hand, industrial trusts would still remain relatively good even if the region decides to extend lockdowns.