.Revellers in this city have dim memories of the Vietnam war. That savage conflict ended in 1975 which was before most Singaporeans were born.

Singapore’s party scene owes a debt to the Vietnam War. It was the catalyst for Singapore’s entertainment scene. In 1965, Singapore agreed to let off-duty American soldiers visit for rest and recreation (R&R). The Americans were housed in Shelford House and Newton House. Bars sprung up in the Orchard Road area to entertain them. Some of the places are still standing.

The memory of the Vietnam war lives on in the bars of Singapore. The number of bars in Singapore increased fivefold between 1965 and 1970.

The American soldiers had braved horrific conditions. There was carpet bombing of villages. Apart from the fighting, tropical diseases like malaria were a threat. The Vietcong used guerrilla tactics such as booby traps that have since become common. Coming to the Lion City was a well-earned respite.

Those who now throng Singapore’s watering holes are getting relief of a different kind. Two years of Covid-19 has squeezed entertainment in this city. Singapore has not seen nightlife beyond 10.30pm. There is pent-up demand. It is now about to explode.

Singapore has announced a reopening of nightclubs from April 1. The number of patrons on a table has been extended from five to 10. Late-night cocktails are back. Night clubs like Attica and Zouk are now back.

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There has been an immediate cascade of bookings. The phone has been ringing off the hook. The cocktail bar Jekyll & Hyde said that its bookings went up 50%. The Atlas Club is booked solid for the next week.

The rosy picture for the bars is reflected in the Straits Times Index (STI). The STI is up 10% year to date, making it the best performer in Asia. It has outperformed the rest of the region by 17%.

Singapore’s hospitality stocks have rallied. Hospitality-related property stocks such as CDL Hospitality Trusts (up 14%); Singapore Airlines is flying high with a 10% rise year to date.

See also: <a class='gtm_see_also_2_inread' style='text-decoration: underline;' href='/news/singapore-economy/singapores-headline-and-core-inflation-figures-increase-47-and-33-october?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>Singapore’s headline and core inflation figures increase to 4.7% and 3.3% in October</a>

Singapore has a unique opportunity to become the entertainment capital of Asia. Hong Kong is facing its fifth Covid-19 wave. Lan Kwai Fong, its entertainment district, was once bustling with merry bankers. Today, it is empty.

The next stage in Singapore’s reopening would be the revival of the MICE industry. MICE stands for meetings, incentive travel, conferences and entertainment. The value of Singapore’s MICE industry grew at a CAGR of 7% in the decade before the pandemic.

In any case, people are tired of Zoom. The real-life alternative would be a relief. Having a beer with a conference delegate is better than a Zoom chat.

Conferences create the setting for chance encounters. One can bump into acquaintances in the hallway. Deals can be hatched in the bar.

Some tasks can only be done in person. Despite improved video conference quality, we have not figured out a way to schmooze online.

One way to play Singapore’s reopening may be through REITs. Singapore has 44 listed REITs and property trusts. There are five hospitality REITs. The hospitality REITs operate hotels and serviced apartments. They could be excellent proxies for Singapore’s rise as the party capital of Asia.

There are a couple of factors that investors should realise about hospitality REITs. Tourist arrivals can be volatile every quarter. The REITs that have a higher portion of their revenue from fixed leases are better placed.

Sink your teeth into in-depth insights from our contributors, <a class='gtm_see_also_3_inread' style='text-decoration: underline;' href='/section/views?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>and dive into financial and economic trends</a>

The REITs have a range of debt levels. The interest coverage ratio ranges from 10x to 4x. The clincher is the degree of fixed interest payments. Ascott Residence Trust has 60% of its debt on a fixed rate basis. It can weather a rate hike better than most.

Another beneficiary of the reopening would be Grab Holdings. It dominates ride-hailing. As people return to the bars, they would book rides. Grab has lost two-thirds of its value since its listing. Its net cash balance is almost half its market capitalisation.

America was on the losing side in the Vietnam war. But the industry it created in Singapore may sparkle.

Nirgunan Tiruchelvam is head of consumer sector equity at Tellimer and author of Investing in the Covid Era. He does not hold any position in the stocks mentioned in these columns.

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