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Real estate, alternative real assets and other diversions
FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 807.47 to 828.74 (2.63%) compared to last month’s update. The REIT Index has reversed to a short-term uptrend, with the 20-day and 50-day Simple Moving Average (20 SMA and 50 SMA) now on an uptrend. The 200 SMA has acted as a resistance for the past 10 days. However, these are small changes as the REIT Index is still moving on a sideways direction in the long-term (see 2nd chart below).
Yield spread (in reference to the 10 year Singapore government bond of 2.63% as of 7th August 2022) widened from 3.47% to 3.67%. The S-REIT Average Yield increased slightly from6.30% to 6.32%,while the decrease in the Government Bond Yields more than offsets this Average S-REIT Yield increase. This resulted in the widening of yield spread. The yield of the REITs sector needs to increase to maintain the average yield spread of 4%. S-REITs have been resilient and have one of the highest risk-adjusted dividend yields compared to other stock exchanges.
SREITS offer one of the highest dividend yields and lower volatility
Bloomberg, SGX, data as of 30 June 2022
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