THE VALUE OF SENIOR HOUSING AS AN ASSET CLASS OF REITS

Abstract

Many studies and research contributions have been attempting to understand the driving forces of the Real Estate Investment Trust industry. As the macroeconomic and socioeconomic environment begins to shift, I see the development and implied demand for senior living as an important emerging trend. This research aims to uncover the viability of a senior living focused Singapore Real Estate Investment Trust through the analysis and proxy of Australian Real Estate Investment Trusts. Considering key parallels between the Australian and Singaporean market and demography, Australia will serve as the more mature and suitable proxy to underline research. Observing key trends between the announcement and developments of senior living in three AREITs will underline the direct effect between the two variables. Identifying the time path of valuation effects — negative or positive — will deem the viability of this investment for S-REITs. Serving as a secondary determinant of correlation, an analysis of the actual cash flow generation before and after the acquisition of senior living in A-REITs will have a role to play in the research. This will help us in understanding and validating the results of my initial findings. This will confirm or qualify the market’s perception of the investments and the actual results through intrinsic cash flow analysis. By the end of this analysis, I hope to have a better understanding of the state of the A-REIT market and how we can better emulate the strategizing of senior living real estate within the Singaporean market.