SINGAPORE: Deals to take private Singapore's real estate investment trusts are expected to gain momentum as the companies reel under rising interest rates and fierce competition to buy assets, bankers and analysts said.
Prospects of a surge in take-private deals come against the backdrop of the industry's damage from the COVID-19 pandemic and its disruption to travel and tourism. "In hospitality REITs and commercial REITs, takeovers are scale-merit opportunities but take-privates like Frasers are really more about corporate strategy and opportunism than about industrial logic," said Lundy.
The other is diversified OUE Commercial REIT, which has investments in both commercial and hospitality sectors. He said in a report he expected the deal to result in"deeper evaluation by sponsors managing REITs currently trading at deep discounts to NAVs, as assets under management growth become increasingly challenging in the face of the rising cost of capital, especially for the smaller ones."