S&P Global Market Intelligence Says Singapore May See More REIT-Derived Products As Investors Seek Diversity
July 7, 2021 – Singapore, already an attractive listing destination for real estate investment trusts, is becoming a regional hub for products built around REITs as investors seek to diversify their holdings and the market matures, analysts at S&P Global Markets said.
In an analysis, S&P said three REIT-focused exchange-traded funds have launched in Singapore in recent years and Singapore Exchange launched two international REIT futures in August 2020.
They also said REIT-focused robo advisors, or digital platforms that use algorithms to invest and manage funds, have started attracting customers. Analysts predict that more such products will become available as the economy recovers from the COVID-19 pandemic and businesses return to normal.
“This is a sign of a maturing market. As the REIT sector grows over a period of time, we expect more such instruments like ETFs and futures products [to be launched], and robo advisors to get bigger,” said Vijay Natarajan, a Singapore-based analyst at Malaysia’s RHB Bank.
Some investors want to hedge their positions using futures contracts, while others invest in ETFs to avoid exposure to a single stock. There are also investors who rely on robo advisors to make their investment decisions. These products give various options for different kinds of investors who want to have an exposure to Singapore’s growing REIT segment, Natarajan said.
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