Singapore-listed Reits have forked out US$16.9 billion (S$23.1 billion) to purchase assets this year, already triple the previous peak reached in 2014.

"Reits are going to be a go-to sector for the next year as consolidation will add another reason to buy alongside yields," said Jin Rui Oh, a Singapore-based director at United First Partners. The enlarged entities would get better market value, analyst coverage and potential index inclusion, he added.

Singapore Reits will deliver 12 per cent to 15 per cent returns over the next year and the deals will continue, said Mr Oh, who specialises in trading special situations created by mergers and acquisitions.

Reits will continue to lure investors amid interest-rate cuts by global central banks, which has already led to more than US$12 trillion of negative-yielding debt. The chase for yield has also made Singapore Reits more expensive, with the sector's estimated dividend yield at 5.36 per cent, almost one percentage point below the level at the beginning of the year.

M&A JUGGERNAUT

In the largest deal this year, CapitaLand spent $6 billion to purchase Temasek Holdings' subsidiary Ascendas-Singbridge to create Asia’s largest diversified real estate group. Ascendas-Singbridge’s flagship projects include the Singapore Science Park and Changi Business Park in Singapore, International Tech Park Bangalore and International Tech Park Chennai in India, as well as Dalian Ascendas IT Park and Singapore Hangzhou Science and Tech Park in China.

In April, OUE Commercial Reit agreed to buy OUE Hospitality Trust to create one of Singapore's 10 biggest Reits. Then in July, Ascott Residence Trust and Ascendas Hospitality Trust agreed to create the largest hospitality trust in the Asia-Pacific region, with $7.6 billion of assets.

SINGAPORE (Reuters) - Two Singapore-listed real estate investment trusts under the Frasers Property group (FRPL.SI) said on Monday they planned to merge to create an entity that will hold assets worth S$5.7 billion ($4.2 billion).

The proposed merger of Frasers Logistics & Industrial Trust (FRAE.SI) and Frasers Commercial Trust (FRCR.SI), the latest in a string of consolidation moves in the sector, will cost about S$1.5 billion, mainly via the issuance of new units to existing investors.

“The Enlarged REIT will have a broadened investment mandate to invest in a wider spectrum of asset classes across logistics, industrial, office, business park and commercial properties,” the two trusts said in a joint statement.