SINGAPORE: Singapore's once booming real estate investment trusts (REITs) may face a round of mergers to weed out the weak who find it increasingly tough to raise funds and refinance loans because of the global credit crisis. At least six of Singapore's 20 listed REITs are valued below what their properties are worth, as are many trusts in Japan and Australia, which means expansion is hampered by higher financing costs and investor returns are limited.Some of the trusts will face higher interest payments when they need to refinance their debts in coming months, leading to lower earnings and distribution to unitholders."I would expect consolidation to gather pace in the course of the next 6-12 months," said Tony Darwell, head of Asian equity research at Nomura. "The cost of debt has risen and it is impacting everyone, especially entities that are highly geared." Read more
(New Straits Times 5-3-2008)
