THE IMPACTS OF DIFFERENT FACTORS ON SHARE PRICE OF S-REIT

Abstract

In the year of 2019, Singapore REIT markets experience a surge as much as 22.3% in terms of total returns. While tremendous run of Singapore REIT market has attracted capital inflows from both institutional and retail investors, analysts have raised concerns over the risk of Singapore REITs being overvalued. Meanwhile, global market has been in a viral of uncertainties in view of the recent trade wars, chaos in Europe and slowing China economy. As a financial centre in the Pacific Asia region, Singapore unavoidably suffers from the impacts of these global uncertainties. This dissertation therefore aims to analyse the impacts of different factors in the economy, real estate industry, and global REIT market over the Singapore REIT prices. In doing so, the dissertation hopes to educate investors and facilitate them in making better informed choices. Using the traditional Ordinary Least Square method, regressions were run over different independent variables and the dependent variable of FTSE ST REIT Index. Economically wise, it is shown that real GDP has strong and positive impact on the S-REIT prices, while inflation and interest rate have weak and negative relationship with S-REIT prices. In terms of the real estate prices, only retail and industrial property price index are significant in explaining SREIT prices. Industrial PPI have a positive impact on S-REIT prices while the effects of retail PPI is adverse. Simple OLS results show that global REIT index have are significant explanatory variable for Singapore REIT index. In contrast, real estate sentiment index has insignificant explaining power on S-REIT prices.