SINGAPORE (Feb 4): In the midst of heightened volatility due to the novel coronavirus outbreak, investors are likely to seek shelter in Singapore REITs, according to DBS Group Research.

While FSTREI Index (REIT Index) rose 6.6% since the low in December 2019, it has fallen 3.5% since Jan 17, 2020, when a few cases of coronavirus outside China were reported. At this point, the FSTREI index is up 2.0% since the start of 2020, outperforming the STI which is down 2.1%, and representing relatively high yield spreads of 3.1%, coupled with about 3.0% growth.

In a Tuesday report, lead analyst Derek Tan says, “Given the uncertainty brought about by the recent travel ban and likely lower growth prospects going forward, we maintain our preference for subsectors with structural growth themes in place and are less elastic to economic gyrations.”

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