Chinese retail malls outperform US office REITs

The Edge Singapore
The Edge Singapore 3/20/2020 06:30 AM GMT+08  • 3 min read
Chinese retail malls outperform US office REITs
Real estate investment trusts, especially US REITs listed on SGX, may be in for further volatility. The huge stimulus that the US administration is proposing will have to be funded by debt and that could drive up US risk-free rates r
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

SINGAPORE (Mar 20): Real estate investment trusts, especially US REITs listed on SGX, may be in for further volatility. The huge stimulus that the US administration is proposing will have to be funded by debt and that could drive up US risk-free rates regardless of the level of the federal funds rate, which is at zero. This could cause a double whammy for the US REITs as the pressure on US capitalisation rates could be upwards at a time when the US economy is slipping into recession.

If that was not enough of a headache, on March 17 the US Federal Reserve announced that the US commercial paper market has been under considerable strain as businesses and households face greater uncertainty in light of the coronavirus outbreak. Hence, the Fed also announced a US$700 billion ($1.02 trillion) quantitative easing programme, and Commercial Paper Funding Facility (CPFF). Chart 1 shows the performance of US REITs versus Chinese retail REITs.

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.