From Bloomberg:
Singapore has established itself as a hub for real estate investment trusts over the past two decades. Now, following the initial blow from the Covid-19 outbreak, its REITs are slowly coming back to the market with a mission: resume their global expansion.
Gordon Tang and his wife Celine, who have one of the biggest REIT stakes in Singapore, are among those leading the charge. Suntec Real Estate Investment Trust, of which they own about one-tenth, completed the acquisition of a 50% holding in a London property last month, finalizing a 430.6 million pound ($557 million) deal that had been put on hold with the pandemic.
Lippo Malls Indonesia Retail Trust and IREIT Global, in which Chinese tycoon Tong Jinquan owns stakes of more than 4.8%, are raising money to fund acquisitions in Indonesia and Spain. Keppel REIT and Ascendas REIT both bought office properties in Australia in September.
Like many other industries, REITs have been hit hard during the pandemic. More than $340 billion of value has been wiped out this year from an index tracking them globally as employees emptied out offices in major cities and shoppers turned to e-commerce. For retail and office properties in financial centers from New York to London and Paris, the future remains grim as companies order employees to stay home and restrictions on movement are reintroduced to prevent a winter surge in cases. Only 15% of office workers in New York are projected to return by the end of 2020.
Keep Improving
But even with Covid-19 resurging in most of Europe and the U.S., some REITs are already betting that prime properties around the world will eventually rebound and are looking for distressed opportunities.
For trusts in Singapore, which houses the most REITs in Asia excluding Japan, transactions are slowly picking up, boosted in part by lower financing costs. Most of the S$3 billion ($2.2 billion) in deals announced since January happened in the third quarter, DBS Group Holdings Ltd. said in a note on Sept. 29 titled “S-REITs: Insatiable growth appetite.” It added that the market should keep improving through the rest of the year and start of 2021, and analyst Derek Tan expects more acquisitions as the coronavirus crisis dissipates over time.
“Pandemic-related distress sales mean some good opportunities for Asian money accessing the overseas market,” said Patrick Wong, a senior analyst at Bloomberg Intelligence. “More transactions are expected to come in.”
Mapletree Logistics Trust is among those that have recently restarted their overseas push. It’s spending S$1.09 billion for real estate in China, Malaysia and Vietnam.
Frasers Logistics & Commercial Trust, controlled by Thailand’s richest person, Charoen Sirivadhanabhakdi, said in August it will acquire properties in Australia and the U.K. for about S$90 million. He’s looking for purchases even as his fortune has dropped more than $9 billion this year to $10.4 billion, according to the Bloomberg Billionaires Index.
Millions Lost
The Tangs’ wealth has also suffered, with the the combined value of their holdings in three REITs currently traded down $234 million for 2020 to $519 million. That’s even despite a $40 million rebound since the end of March, according to data compiled by Bloomberg....
....MUCH MORE
As reported in last week's Real Estate: "Hotel Owners at Major Crossroads Due to Covid-19":
...Still, distress always creates new opportunities, and there are plenty of buyers in the market, including Starwood Capital Group co-founder Barry Sternlicht and the British billionaire brothers David and Simon Reuben of Reuben Brothers....
