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REITs take big hit from virus-induced recession woes

All News 09:44 March 30, 2020

SEOUL, March 30 (Yonhap) -- South Korean real estate investment trusts (REITs) have been hit hard by escalating concerns over a global recession stemming from the new coronavirus outbreak, data showed Monday.

Shares in Lotte Shopping Co.'s REIT, listed in October last year, finished at 4,910 won (US$4.03) Friday, down 20.3 percent from the end of last year, according to the data from the Korea Exchange.

NH Prime REIT, listed in December, saw its share price tumble 21.8 percent over the cited period. The trust is affiliated with financial holding firm NH Financial.

Other listed REITs, including Shinhan Alpha REIT, have also suffered double-digit price declines.

The global coronavirus pandemic has also pounded local REITs that invest in overseas real estate.

REITs take big hit from virus-induced recession woes - 1

According to financial information provider FnGuide, overseas REITs with assets of 1 billion won or more have posted an average yield of minus 27.6 percent for the past month ending Friday.

Over the same period, overseas stock funds registered a negative yield of slightly over 16 percent, with the median return for domestic equity funds coming to minus 20.4 percent.

Market watchers said virus-induced recession fears have dashed investor hopes for high and stable returns in an era of low interest rates and prolonged economic sluggishness.

The coronavirus outbreak has dealt a harsh blow to economic activities across the world, stoking worries of a global economic recession or at least two consecutive quarters of contraction.

The novel coronavirus has killed 152 South Koreans so far, with infections nearing 9,600. As of Monday, the global death toll hovered above 33,000, with the number of confirmed cases surpassing 700,000.

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