“Concerns remain on the sustainability of this growth, but our comparison shows [the US] REITs should be able to weather headwinds – backed by asset diversification, long weighted average lease expiry and healthy balance sheets,” RHB analyst Vijay Natarajan writes in a note dated Aug 19.
RHB adds that valuations of US REITs are cheap, with segmental yields averaging 8.3%, or 280 basis points higher than Singapore office REITs.
The brokerage has maintained its “overweight” rating for the sector.
The key risks, however, are a prolonged economic downturn, collapse of co-working office players and policy uncertainties from the upcoming US election.
As at 1.24 pm, Manulife US REIT was down 1 cent or 1.4% at 72.5 US cents with 1.9 million units changed hands.
Keppel Pacific Oak US REIT was up 0.5 cent or 0.7% at 72.5 US cents with 238,900 units changed hands.
