S-Reits gearing up with healthy balance sheets

THE gearing ratio, also known as aggregated leverage, is the ratio of a Reit's total debt to its total assets. This metric, used to assess a Reit's financial leverage, is closely monitored by investors. A low gearing ratio could point to greater capacity to undertake more debt for future acquisitions while a high gearing ratio could lead to credit concerns especially during economic downturns.