Phillip Capital Management – Favourable S-REITs Yield Spreads Against 10-year SGS

Phillip Capital Management (S) Ltd has recently published an article titled  “Favourable S-REITs Yield Spreads Against 10-year SGS”.

The article highlights some of the insights our fund managers gathered:

  • As at the start of April, the market seems to have priced in an average 20% cut in DPUs for S-REITs (base case scenario)
  • In our worst case scenario (from perspective of April), assuming a 50% cut in future DPUs, S-REITs as a whole would yield about 4.16%
  • Compared to the 10-year SGS, yield spreads were 5.63% and 3.14% for base case and worst case respectively
  • During GFC, yield spread between S-REITs and 10-year SGS was only 3.5%

To find out more, please read the full article.