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Stick with S-REITs in growth sectors amid inflation and high oil prices: DBS

Felicia Tan
Felicia Tan3/21/2022 2:52 PM GMT+08  • 5 min read
Stick with S-REITs in growth sectors amid inflation and high oil prices: DBS
The brokerage has also added MLT to its top eight picks as the warehouse sector is the least likely to be affected by rising costs
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Amid persistently high inflation rates coupled with rising oil prices, businesses are now looking at higher utilities and petrol costs, as well as labour costs. Landlords, too, will have to face higher utility and maintenance costs when their contracts are rolled over to the 2HFY2022 and FY2023.

With most Singapore REITs (S-REITs) as landlords, operational costs in maintaining the common areas, will have to be borne as well.

While some of these costs can be defrayed through service charges, landlords will still have to bear some of the burden going forward, note DBS Group Research analysts Derek Tan, Rachel Tan, Dale Lai and Geraldine Wong.

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