SINGAPORE (Jan 7): UOB Kay Hian thinks that the impact of rising interest rates on the dividends paid by Singapore's Real Estate Investment Trusts is only “minimal” and their prices have already factored in higher rates.

The research house says even if rates rise by 1 percentage point, the distribution per unit will fall between 0.4% and 3.8% as the REITs have long debt maturity periods and a higher portion of their loans at fixed rates.

UOB Kay Hian favours “deep value” REITs such as CapitaLand Commercial Trust and those that are well-diversified with significant overseas presence, such as Ascott Residence Trust and Mapletree Logistics Trust.