SINGAPORE (May 29): The hospitality sector continues to be the worst performing sector. Despite their pedigree, CDL Hospitality Trusts (CDL-HT) and Ascott Residence Trust (ART) ranked among the REITs with the highest yields (see chart 1), based on their historic DPUs. REITs with high yields have a problem in that their cost of capital is high and equity fund raising will be difficult. While the circuit breaker in Singapore will be gradually lifted from June and Europe has started to lift its lockdowns, tourism is unlikely to stage a quick recovery. Hence, the hospitality REITs may continue to trade at high yields this year.

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