REIT ASIAPAC MAGAZINE REITASIAPAC AUGUST 2020 ISSUE | Page 12

REIT ASIAPAC
Hong Kong and Singapore were the third and fourth top REIT
investment destinations, according to the survey.
Fund managers also cited China, Taiwan, and South Korea as
among the potential REIT investment destinations.
At the end of the day, investors looking
for yield in the post-pandemic era will
rely on REITs’ proper disclosure. “The
better visibility, the more trust, the
better upside,” a fund manager said.
4. HEALTHY BALANCE
SHEETS EMERGED AS TOP
CONSIDERATION IN INVESTING
Q
How will the Covid-19 pandemic change the way
you invest in REITs?
How REITs manage their balance sheet in times of crisis is a
top consideration for investors as they consider where to put
their money.
“[There is] greater focus on cash flow security, credit quality,
and balance sheet strength,” a fund manager said in the
survey. “[We will] be more selective for REITs with healthy
balance sheets and stable rental structures,” another said.
Fund managers also expressed optimism that REITs, in general,
are poised to handle the negative impact of the pandemic.
“Structurally, there has been a huge shift to activity being
conducted electronically. It is probable that a sizable part of
this will endure beyond the lockdowns,” a fund manager said.
Others also indicated sector allocation changes as part of their
adjustments to the post-pandemic investment environment.
“It changes sector preferences, but in Asia, the impact won’t
be as large structurally as elsewhere,” a fund manager said.
Some managers, however, said there will be no changes in the
way they invest in REITs post-pandemic.
At the end of the day, investors looking for yield in the postpandemic
era will rely on REITs’ proper disclosure. “The
better visibility, the more trust, the better upside,” a fund
manager said.
5. REAL ESTATE
VALUATIONS EXPECTED
TO DECLINE FURTHER
Q
What are your views about current real estate
valuations?
Real estate valuations in Asia Pacific are projected to drop
further in the coming months. Among the most recent
transactions was property developer OUE Limited’s sale of
US Bank Tower for US$430 million announced on July 17.
The sale price is about two-thirds of the asset’s US$650
million fair value as at Dec 31, 2019, according to OUE’s
latest annual report. In a separate transaction, Hong Kong’s
New World Development in May agreed to sell the podium
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