Asian real estate investment trusts (REITs) are poised to grow via acquisitions, according to several industry players who attended the annual Real Estate Investment World Asia conference in Singapore.
They noted that the expected growth will be fuelled by ample liquidity and lower capital cost in the market.
“The cost of capital is getting back to an area where it makes it more attractive for REITS to acquire assets,” said Jason Kern, Head of Real Estate Advisory at Hongkong and Shanghai Banking Corporation (HSBC).
Kern believes the Asian REIT market has grown in the past year, with six new REIT listings over one year. HSBC data revealed that 98 REITs listed in Asia have a total market capitalisation of US$97 billion.
Nicholas McGrath, Chief Executive of the Manager of Singapore-listed AIMS AMP Capital Industrial REIT, also believes the cost of capital has dropped and noted that there is sufficient liquidity in the market.
Some market players expect more REITs to launch their initial public offerings (IPOs) in the coming months.
Kevin Xayaraj, Chief Executive of Sabana REIT, anticipates more similar REITs to be floated this year.
“With the success of the IPO, I think there will be a lot of Syariah-compliant REITS coming to Singapore and the rest of Asia,” he said.
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