Dear readers, the following is the year-to-date performance of the Reits and Trusts that are in the Straits Times Index constituent stocks:
Keppel DC Reit: -19.4%
Mapletree Logistics Trust: -9.9%
Frasers Logistics & Commercial Trust: -8.7%
Mapletree Pan Asia Commercial Trust: -4.4%
Mapletree Industrial Trust: -2.4%
Capitaland Integrated Commercial Trust: 2.6%
Is it wonder that except for Capitaland Integrated Commercial Trust which returns a slightly positive year-to-date return, the other STI Reits and Trusts have negative returns when all around us, interest rates are going higher?
When interest rates are going ahead, the prices of Reits and Trusts will in general trend down and provided the same dividends yield quantums are being paid, the high dividend yield of Reits and Trusts in general will be preserved.
But that is an “if”. In the case of economic recession, there is a possibility that dividend yields of Reits and Trusts will be down as well.
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