EFFECT OF COVID-19 ON REITS IN SINGAPORE

Abstract

The Singapore Real Estate Investment Trust (S-REIT) market has grown tremendously since its inception in 2002, with 42 listed REITs currently as of 2020, and a market capitalisation of over S$100 billion. This research paper explores the impact of the COVID-19 pandemic in Singapore on the stock market returns of REITs. There are very few, if not, no research papers at all right now, that have explored how COVID-19 has impacted REITs, given its relatively new occurrence in our global climate. An event study methodology will be adopted, considering key announcement dates on which the Singapore Government released information regarding the spread and control measures of this pandemic. We compare the performance of REIT during the COVID-19 pandemic by examining abnormal returns using an event study market model regression. We notice a mixed reaction to the movement of prices, and while there were standard sectors that got impacted, such as the hospitality sector, it is still very interesting to see how the stock market is not an actual representation of the state of the economy.