S-REITs’ results for the fourth quarter of 2010 were “a continuation of the strong showing in 3Q10 with the sector reporting topline, net property income and distributable income growth of 10 percent, 13 percent and 11 percent respectively”, said DBS Vickers Securities.
Hospitality REITs continued to outperform with strong organic driven growth, while acquisitions completed last year boosted distribution for the remaining S-REITs, it noted.
“While retail and industrial S-REITs continue to deliver single digit growth, office REITs reported weaker results both on year and on quarter, as passing rents remained below the peak rents signed in 2007-2008,” said DBS Vickers.
“We expect this trend to continue in the coming quarters, only to reverse in 2012.”
S-REITs were good inflation hedges considering their ability to increase rental income above inflation, it added. It also maintained its view that hospitality REITs will continue to show the strongest earnings potential.