Good Yield Hunting

Sector stands out as investors eye yield
S-REITs have gained 2.4% MoM to outperform the market, helped by a 20-
30bps pull-back in the UST 10-year yield since end-Apr. Capital flows into
yield names remain strong, underpinned by recovering cashflows and
DPUs. S-REITs currently trade at 2.7% above the 10-year gov’t bond yield,
undemanding versus peers, and should remain in favour against rising
inflation pressures and expectations of stronger DPUs into 2H21. Sectorwide
DPUs are more resilient from AUM expansion, with sound balance
sheets and low interest rates supporting acquisition upside in the next 12-
24 months. AREIT, CICT, FCT and MCT remain our top BUYs, while SASSR,
MUST and PRIME are set to deliver above-sector yield and growth.