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Last year and 2026 were supposed to be cyclical rebound years for S-REITs after three years of high interest rates which spiked their borrowing costs and suppressed money available to dividend payouts. Market watchers were also anticipating a stronger REIT IPO pipeline this year compared to 2025, driven by easing interest rates.<\/p>\n
But the war in Iran has thrown a huge spanner in the works.<\/p>\n
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.<\/p>\n
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\u2019s central bank has moved with a rate hike this month.<\/p>\n
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.\u00a0<\/p>\n
In such an uncertain environment, potential REIT IPOs could choose to hold back on their plans.<\/p>\n<\/div>\n