Commentary: Amid the Iran war, is it all doom and gloom for Singapore-listed REITs?

The US Federal Reserve, at its last two rate-setting meetings in January and this month, has already paused its rate cuts as it adopts a wait-and-see attitude.

The fear is that if the war in the Middle East drags on, the resultant energy shock will fuel global inflation. If central banks respond by hiking interest rates, rising financing costs could again weigh on REIT players, many of whom have significant bank borrowings. Already, Australia’s central bank has moved with a rate hike this month.

Moving ahead, S-REITs are likely facing the sum of all fears: unpredictable and ugly geopolitics, potential energy shocks, supply chain crunch, slowing economic growth, as well as rising inflation and interest rates. 

In such an uncertain environment, potential REIT IPOs could choose to hold back on their plans.