Real estate investment trusts (Reits) in Singapore are largely insulated from an expected rise in interest rates over the next 12 months due to their high portion of fixed-rate debt and low need to refinance, said ratings agency Moody's Investors Service on Wednesday.
Moody's noted that for the 13 Singapore Reits that carry a credit rating, more than half their debt is tied to fixed interest rates.
The Reits also have a weighted average debt maturity profile of more than two years - which means the bulk of their debt will only come due more than two years from now, the ratings agency said. Only 18 per cent of the total debt of the 13 Reits will be due in the next 18 months.
Suntec Reit and Frasers Commercial Trust are most exposed to a rise in interest rates, given their fixed-rate debt amounts and refinancing requirements, according to Moody's.
On the other end of the spectrum, the Reits least likely to be hit by rising interest rates are Frasers Centrepoint Trust and Saizen Reit, it added.
Meanwhile, the Reits with a lower average cost of debt are the most sensitive to higher rates, although they may not see their borrowing costs increase if they have taken mitigating measures, Moody's said.
Reits in this group would include Mapletree Greater China Commercial Trust, Keppel Reit and Mapletree Commercial Trust.
The remaining rated Singapore Reits are Mapletree Logistics Trust, CapitaCommercial Trust, CapitaMall Trust, Ascendas Reit, Ascott Residence Trust and Cache Logistics Trust.