Sunday, March 27, 2022

Going Back To The Good (New) Old Days

Over the course of next week, we are going to see the beginning of the return of pre-COVID-19 normalcy, to a certain extent. To name a few, up to 75% of employees who previously work from home (WFH) could return to their workplaces, mask-wearing is not required at certain places, accommodation of up to 10 pax at eateries, and fully vaccinated incoming visitors would only require a pre-departure COVID-19 test within two days before departure for Singapore1. Not forgetting, of course, land travel between Malaysia and Singapore is finally allowed for fully vaccinated persons without the need for quarantine and tests2.

And the market reaction is instant. When the announcement of the relaxed measures came out after 11:00 am on 24 March 2022, prices of several retail, commercial and hospitality real estate investment trusts (REITs) received a boost. A few examples: Frasers Centrepoint Trust went up from SGD 2.36 to a high of SGD 2.45 before settling to SGD 2.41 at the close of the week3. Suntec REIT moved up from SGD 1.72 to SGD 1.753, and Frasers Hospitality Trust climbed 5.3% from SGD 0.47 to SGD 0.4953.


With COVID-19 slowly taking a backseat in our lives, are we really going back to the good old days?


Same Same, But Different…


For almost two years, COVID-19 had caused disruptions in many people’s lives all around the world, but the period also introduced a new paradigm on how we work, which is WFH. Though nothing new, the concept of WFH took the pedestal during the period where people were told to stay at home for their health’s sake, yet maintain a semblance of economic activity. According to a survey by Randstad, 41% of respondents would prefer remote working to having bigger bonuses4. Putting this in context, a substantial minority of workers would prefer to WFH, if the job allows. Employers, whether they like it or not, would now need to factor this to attract better talent for their organisations.


Coming on an investment front, this may bring up some concerns on the viability of office and commercial REITs going forward. On the other hand, however, some analysts are seeing an improvement in office rentals this year due to an opening economy and tight supply of office spaces5. Whether good or bad for such REITs, in my opinion it is too early to have a conclusion.


…But Still The Same


Oftentimes, a lot of analysts and investors heralded e-commerce as one of the harbingers of the “retail apocalypse”, where physical brick-and-mortar shops and malls were closed down due to consumers’ preference of buying things online. COVID-19 had brought about a further boom of e-commerce, due to more people mostly staying and/or working from home, and coupled with a long-standing consumer habit known as “showrooming”.


This naturally led to the deemed negative prospects of retail REITs, and no investor would like to see malls with sparse or no crowds. Still, we need to contextualise the whole thing. At least in Singapore, malls, especially those situated in the heartlands, still has a place in our culture and society. With the reopening of borders, visitors would start to visit malls in the tourist belts (and it is improbable for a visitor to do e-commerce fully from a hotel room while in a foreign country). My take would be retail malls are here to stay, for at least a decade.


Stay safe, stay vested.




The Bedokian is vested in Frasers Centrepoint Trust and Suntec REIT.




1 – Sue-Ann, Tan. Singapore eases Covid-19 rules: What you need to know – from mask wearing to gathering rules. The Straits Times. 24 Mar 2022. (accessed 26 Mar 2022)


2 – Prime Minister’s Office Singapore. Joint Press Statement by PM Lee Hsien Loong and Pm Dato’ Sri Ismail Sabri Yaakob on the Reopening of the Land Border. 24 Mar 2022. (accessed 26 Mar 2022)


3 – Yahoo Finance as at 26 Mar 2022.


4 – Cheah, Megan. 4 in 10 Singapore employees would choose remote working over bigger bonus: Randstad. The Business Times. 15 Mar 2022. (accessed 26 Mar 2022)


5 – Ramchandani, Nisha. Singapore office rents poised to improve in 2022. The Business Times. 28 Jan 2022. (accessed 26 Mar 2022)

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