SREITs embark on overseas property acquisition spree to buck lifeless property market

Over 66% of REIT acquisitions are overseas.

Real estate investment trusts (REITs) are elbowing each other for growth in Singapore's crowded REIT market.

Data from the Singapore Exchange show that here are 34 trusts listed as REITs on the Mainboard, made up of 28 REITS governed by the Collective Investment Scheme and six stapled securities.

They have a combined a market capitalisation of S$68.9 billion and they averaged a 3.5% in year-to-date total return

SNL notes that Singapore’s REIT market had doubled in size from five years ago, prompting SREITs to look overseas in their tireless search for yield.

SNL data show that about 66% of SREITs' acquisitions were overseas between 2012 and 2014, totaling approximately $10.89 billion.

Only about 27% of SNL-covered REITs had all of their assets located solely in Singapore, while about 18% of them had all of their assets located abroad.

A report by PwC showed that with much of the domestic investable stock already securitized, SREITs have no choice but turn to nearby markets to acquire properties.

"Investors have therefore reported SREITs kicking tires of assets all over the region, from major markets such as Japan, Australia, and China to emerging economies such as the Philippines, Indonesia, and Vietnam," the report stated.