Based on CIMB's research:
S-REITs’ valuations have become compelling again, with average CY12 yields now at 7%. With investors moving away from risk positions, their relative attractiveness as yield instruments will likely be enhanced. The Fed recently pledged to keep US interest rates low till mid-2013, which would support yield spreads, and create a more favourable environment for refinancing and acquisitions, we believe. Capital structures for S-REITs are also more robust than in 2008. We see these as powerful catalysts for share-price outperformance. We upgrade the sector from Neutral to Overweight and upgrade CMT and CDLHT to Outperforms following their recent pullback. We prefer the hospitality, industrial and retail segment over office. Our key picks are AREIT, FCOT, Starhill, Cache and CDLHT. CCT remains an Underperform.
Looks like it is time for me to load up on the SREITs again soon.
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