Why Now Is A Good Time To Re-look At S-REITs
- ellaintan
- Aug 27
- 1 min read
Based on three recent analyst reports, S-REITs are moving back into favour with rates drifting lower, valuations still undemanding, and rental trends proving resilient. Lower financing costs are already lifting distributable income, with further relief expected if the Fed begins easing from September 2025.
Why the Singapore market backdrop supports S-REITs now
Interest costs are falling
Three-month SORA has retreated to the ~1.7–1.9% zone, and many S-REITs reported lower YoY funding costs in 1H25. Distributable income growth is starting to outpace NPI as interest expense rolls down.
Valuations are still attractive
Sector P/NAV is ~0.9x and forward yields ~5.8%, leaving a c.3.7–4.0% spread over 10-year SGS, an appealing entry point if bond yields compress further.
Fundamentals are steady
Positive rental reversions persisted across retail, office and industrial segments, with tight Grade-A CBD supply and resilient suburban retail supported by domestic spending and vouchers.
Liquidity and growth are returning
YTD equity raising and selective acquisitions signal a re-opening of the “virtuous cycle” of recycling and growth.
Most Mentioned S-REIT Picks Across 3 Broker Reports
1. Keppel REIT (KREIT) – Strong double-digit rental reversions and prime CBD office exposure
2. Lendlease Global Commercial REIT (LREIT) – Mid-cap recovery with balance sheet de-risking and Singapore growth pipeline
3. CapitaLand Ascott Trust (CLAS) – Travel recovery tailwinds and expansion into student housing and rental living
4. Frasers Centrepoint Trust (FCT) – Suburban retail resilience and steady rental reversions supported by essential spending
5. Elite UK REIT (ELITE) – High-yield play backed by government leases and sensitivity to rate cuts
Link to Reports:
Comments