Singapore real-estate investment trusts (Reits) have been hit hard by the novel coronavirus outbreak as well as measures put in place by the government to contain the pandemic. Such trusts are companies that own and, in most cases, operate income-generating properties, which can range from office and apartment buildings to warehouses, hospitals and shopping centres. Their shares can be traded in equity markets. The pandemic and containment measures such as lockdowns and social distancing have raised concerns about the viability of tenants in Reit properties, analysts said. Moreover, in a set back to the trusts’ cash flow, the city has allowed tenants to seek rent deferrals. “[The Singapore government has] introduced legislation that allows tenants adversely impacted by Covid-19 to seek rent deferral from landlords, which is obviously creating significant additional cash flow uncertainty for landlords in Singapore,” said Koh Shern-Ling, Singapore-based portfolio manager at US asset management company Principal Global Investors. Singapore unveiled a S$60 billion (US$42 billion) stimulus package at the beginning of April , and even enacted a law to make sure Reit landlords, some of whom are majority-owned by Temasek Holdings, the state investment unit, would benefit and jobs would be protected. On April 16, the Monetary Authority of Singapore extended the deadline for dividends distributed by Reits by up to 12 months from the end of the financial year. These trusts must usually distribute dividends within three months of the end of the financial year to retain their status as Reits. In a report on April 21, Moody’s Investors Service said the extension provided a welcome lifeline. The deferral of dividend payments will allow Reits to preserve cash and support liquidity amid difficult operating conditions caused by the outbreak, said Moody’s analyst Sweta Patodia. The ratings agency, however, expected cash flows to be severely affected this year, possibly leading to a devaluation in assets. Faced with the effects of the pandemic, Singapore’s Reits had little choice but to continue offering incentives to tenants to manage vacancy rates, or suffer even weaker earnings, said Hasira De Silva, senior director of Fitch Ratings’ South and Southeast Asia industrials, property and consumer ratings team. “If Reits do not provide rebates, tenants will have no option but to default [or] close their outlets in malls. However, by providing rebates to tenants, Reits may be able to help some tenants stay open or remain in business for longer, and these Reits could benefit from a faster recovery in earnings when social distancing is relaxed,” he added. Meanwhile, Reits in Hong Kong faced more deep-seated problems, according to Principal Global’s Koh. “Hong Kong is facing its own structural challenges from the political uncertainty created by the pro-democracy movement, and the retrenchment of Chinese tourist spending as a result. Corporations are also assessing if they need to be in Hong Kong or if they can hub elsewhere. “This is a challenge that is more deep-seated and longer term in nature, whilst the problem faced by the [Singapore Reits] is arguably short term and cyclical as opposed to structural,” he added.