Growth of Reits correlates with rising rentals

Looking at the table ("SGX-listed company earnings for Q2 ended June 2014"; yesterday), what caught my attention was that real estate investment trusts (Reits) dominated the list of top earners.

There is widespread concern that Singapore is becoming too expensive to do business, because of rising manpower costs and rentals.

The growth in the number of Reits as well as their rising earnings correlate with the increase in rental and business costs in Singapore. As a consumer, I am concerned about the impact this has on inflation and retail prices.

Of course, Reits are legitimate businesses and one cannot ban them.

Neither would doing without them lower rentals immediately.

In fact, having them gives the authorities the chance to regulate their activities and, hence, the overall rental increases. I hope someone is looking into this.

Wong Weng Fai

This article was first published on July 30, 2014.
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