Dear readers, in the previous post, I shared a video which outlined the impact of Covid-19 pandemic to Reits (which also extends to trust in my belief).
Indeed, the Covid-19 pandemic shows just how oft-cited defensive equities and business trusts could also be affected in a big manner with all businesses shut close for a month during the Circuit-Breaker period. With economy slowing, I think some of these businesses may eventually fold.
I always hold the view that Reits and Trusts are essentially equities. They would experience the same macro risks as many businesses.
I have also said that for Reits and Trusts to grow, they must increase the asset portfolio under management. It has in recent years been rather challenging to do that in an increasing competitive business environment. Furthermore, right now, the threat of the Covid-19 may be undermine the retention of tenants for Reits and Trusts.
Going forward, I expect local Reits and Trusts here to consolidate, to reduce dividend yield or privatise.