Money and Me: S-REITs at the Turning Point – Income, Opportunity and the New Owners of Property

S-REIT Dec-2025: Navigating the Recovery and Spotting the Winners

The tide is finally turning for Singapore Real Estate Investment Trusts (S-REITs). After a challenging period, the combination of falling interest rates and resilient operational fundamentals has breathed new life into the sector. As we look toward 2026, the focus for investors is shifting from “surviving” to “thriving.”

1. 2025 Performance Review: The Standout Performers

  • In 2025, REITs with predominantly Singapore-based assets have led the charge. Performance has been particularly strong in the industrial and diversified commercial sub-sectors

Key Highlights:

  • Industrial Strength: Small and mid-cap industrial REITs like Alpha Integrated and ESR REIT have seen resilient DPU (Distribution Per Unit) growth.
  • Retail Resilience: In the suburban retail space, Frasers Centrepoint Trust (FCT) has leveraged high occupancy and positive rental reversions in necessity-based malls.
  • Prime Rebounds: CapitaLand Integrated Commercial Trust (CICT) and Mapletree Pan Asia Commercial Trust (MPACT) have rebounded strongly through active capital management of their prime assets.
REITSub SectorYTD Price ReturnTTM DPU Yield2025 Total Return
Alpha Integrated REITIndustrial30.6%6.9%37.5%
ESR REITIndustrial23.1%7.8%30.9%
AIMS APAC REITIndustrial15.7%6.5%22.2%
Capitaland Integrated Commercial TrustDiversified19.5%5.9%25.4%
OUE REITDiversified22.4%4.8%27.2%
Mapletree Pan Asia Commercial TrustDiversified18%5.5%23.5%
Suntec REITDiversified16.7%4.5%21.2%
Frasers Centrepoint TrustRetail7%5.3%12.3%
Starhill Global REITRetail12.7%6.3%19%
Lendlease Global Commercial REITRetail9.8%5.9%15.7%

Source: REITsavvy.com Screener Nov 18-2025

2. Strategic Investing in a Falling Rate Environment

While lower rates provide a tailwind, investors must be selective. A realistic time horizon for a full recovery is 3 to 5 years, as it takes time to refinance high-cost debt and for valuation caps to compress.

Two Winning Strategies:

  1. Focus on High-Quality Cash Flows: Target sectors like suburban retail, healthcare, and prime logistics.
  2. Identify Value: Look for REITs trading at attractive Price-to-NAV (Net Asset Value) discounts that have been oversold.

Pro-Tip: Avoid the “Yield Trap.” Do not chase the highest headline yield without checking the balance sheet. Prioritize low gearing ratios and high interest coverage ratios (ICR), which provide the “dry powder” needed for future acquisitions.

3. A Shift in Prime Ownership: The Private Fund Threat

A defining trend is emerging: prime assets are increasingly moving away from listed S-REITs toward private fund structures.

  • The Problem: Many S-REITs with Singapore office exposure trade at significant discounts to book value (e.g., Suntec at 0.7x P/NAV and OUE REIT at 0.62x P/NAV).
  • The Constraint: Listed REITs often struggle to make DPU-accretive deals because raising equity at discounted prices dilutes unitholders.
  • The Private Advantage: Private funds, backed by patient institutional capital, can bid more aggressively for “trophy assets” without the pressure of short-term public market volatility.

This suggests listed S-REITs may increasingly focus on smaller assets or projects requiring intensive redevelopment.

4. What’s on the Radar for 2026?

As we move into 2026, the market will differentiate between managers who can deliver and those who cannot. No longer can managers hide behind the excuse of high interest costs.

  • Healthcare REITs: Parkway Life REIT (PLife) is a top pick due to its defensive nature and rental escalation formula tied to inflation. First REIT is also under watch regarding its strategic review and potential offloading of Indonesian assets.
  • New Economy Industrial: Demand for data centers, high-spec logistics, and business parks is expected to outpace supply as the economy digitizes. These sectors represent a unique intersection of property and technology growth.

Final Remark

2026 will be the year to separate the winners from the losers. With interest rates on a downward trajectory, the stage is set for REITs to grow DPUs through acquisitions and portfolio restructuring.

Kenny Loh is a distinguished Wealth Advisory Director with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.

In addition to his advisory role, Kenny is an esteemed SGX Academy trainer specializing in S-REIT investing and regularly shares his insights on MoneyFM 89.3. He holds the titles of Certified Estate & Legacy Planning Consultant and CERTIFIED FINANCIAL PLANNER (CFP).

With over a decade of experience in holistic estate planning, Kenny employs a unique “3-in-1 Will, LPA, and Standby Trust” solution to address clients’ social considerations, legal obligations, emotional needs, and family harmony. He holds double master’s degrees in Business Administration and Electrical Engineering, and is an Associate Estate Planning Practitioner (AEPP), a designation jointly awarded by The Society of Will Writers & Estate Planning Practitioners (SWWEPP) of the United Kingdom and Estate Planning Practitioner Limited (EPPL), the accreditation body for Asia.

If you need any financial advice, please contact kennyloh@fapl.sg

You can join his Telegram channel #REITirement – SREIT Singapore REIT Market Update and Retirement related news. https://t.me/REITirement

Listen to his previous market outlook interviews here:

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