Money and Me: S-REITs in the Spotlight — Rate Cuts, New Indices, and the Next Wave of Growth

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23rd Sep 2025

How could the new iEdge Singapore Next 50 Indices  reshape valuations, visibility, and investor opportunities.

Hosted by Michelle Martin, this episode dives into how the Next 50 indices could unlock liquidity, ETF flows, and future growth for S-REITs within a context of falling rates.

REIT specialist and Wealth Advisory Director, Kenny Loh breaks down the impact of falling borrowing costs and where income-focused investors should be looking now.

From Centurion Accommodation REIT’s IPO to data centres, retail, and healthcare REITs – find out which sub-sectors are set to shine.

Q&A Section

1. The launch of the iEdge Singapore Next 50 indices marks a new chapter for the mid-cap segment of the market. How are S-REITs positioned within these new benchmarks, and why do they have such significant representation?

Kenny: S-REITs represent 16 of the 50 constituents, accounting for around 44% of the iEdge Singapore Next 50 Index by weight. This prominence reflects their importance in Singapore’s market, their stable business model, and strong investor demand for defensive, income-generating assets. It also underscores Singapore’s reputation as Asia’s REIT hub, with mid-cap S-REITs fitting the liquidity and capitalization criteria for index inclusion.

2. How will being a constituent of these new indices affect a REIT’s liquidity and valuation? Will this attract new capital flows, and from what type of investors?

Kenny: Index inclusion usually improves liquidity and valuation due to greater visibility, eligibility for index-linked ETFs, and capital inflows from passive and institutional investors seeking diversified mid-cap exposure. Historically, such inclusion has drawn capital from both retail and institutional investors, as it provides new exposure with lower correlation to the STI.

3. Could these new indices boost the overall S-REIT index, given that many of the components overlap?

Kenny: Yes. With significant overlap, positive re-rating and flows into the new indices could spill over into the broader S-REIT index, supporting prices and narrowing performance gaps. Increased investor attention and fund inflows often enhance sentiment across the sector. For REIT managers, index inclusion creates measurable targets, motivating better engagement, transparency, and accountability.

4. Will these new indices lead to the creation of new investment products such as S-REIT-focused ETFs or index funds? What are the benefits and risks for retail investors?

Kenny: It’s highly likely that new ETFs or index funds will follow. The benefits include diversification, reduced single-stock risk, and easy access for retail investors. Risks include management fees, high REIT concentration, and vulnerability if interest rate cycles or the economy turn adverse. In downturns, blue-chip REITs tend to hold up better than smaller or mid-cap names.

5. How do you see the performance of the iEdge Singapore Next 50 compared to the iEdge S-REIT Index or the FTSE ST REIT Index?

Kenny: Historically, the iEdge Singapore Next 50 delivered ~5% annual returns over 10 years, lower than the S-REIT and FTSE ST REIT indices which typically outperform due to their blue-chip focus. However, year-to-date 2025, the Next 50 has outperformed the STI (25% vs 19%), driven largely by REIT strength in a falling rate environment.

Fed Rate Cut Impact

6. The U.S. Federal Reserve recently cut rates by 25 basis points. How will this impact the Singapore REIT sector?

Kenny: Lower borrowing costs improve REITs’ debt serviceability, boost DPU, and make yields more attractive compared to bonds. This should support property values, investor demand, and overall sector performance.

7. Which specific S-REITs will benefit the most?

Kenny: REITs with higher gearing, significant floating-rate debt, or near-term refinancing needs—particularly in the industrial and retail sectors—stand to benefit the most. Those with substantial Singapore-dollar borrowings may see quicker savings, as SORA tends to fall faster than U.S. interest rates.

8. With rates falling, refinancing activity is picking up. How significant is this trend, and how will it translate into higher DPU?

Kenny: It’s very significant. Refinancing at lower rates immediately improves interest coverage and frees up distributable cash, which translates into higher DPUs. That said, REITs need to weigh interest savings against the costs of early loan termination.

9. How quickly will investors see the benefits in DPU?

Kenny: Generally within the next quarterly DPU report after refinancing, with greater impact as older high-cost debt rolls off in subsequent periods.

10. The S-REIT index has recovered but still lags the broader STI. What explains this divergence, and will the gap close?

Kenny: REITs underperformed due to past rate hikes, while banks and industrial stocks drove STI gains. With U.S. 10-year yields still elevated above 4%, REITs remain cautious. But as risk-free rates decline and DPU growth resumes, the performance gap could narrow.

11. Beyond rates, how are sub-sectors like retail, office, industrial, and hospitality performing?

Kenny: Industrial and logistics REITs are strong, driven by resilient demand and limited supply. Hospitality REITs lag on weaker DPUs, while retail and office REITs have been resilient. Data center REITs are well-positioned given AI-driven demand, with more acquisitions expected as financing costs ease. In the U.S., commercial office properties may rebound as cheaper financing revives transaction activity.

Centurion Accommodation REIT IPO

12. Centurion Accommodation REIT (CAREIT) is Singapore’s first pure-play accommodation REIT. What are your thoughts on this niche focus?

Kenny: CAREIT provides exposure to purpose-built worker and student accommodation—defensive niches with stable occupancy and resilient demand. Pros: strong rental growth and predictable cash flows. Cons: regulatory risks, less diversification, and dependence on education or migrant trends.

13. CAREIT projects attractive yields of 7.47% (2026) and 8.11% (2027). How does this compare with other S-REITs?

Kenny: These yields are above the sector average of 5–6%, reflecting its niche profile and growth potential. The premium compensates for concentration risk and sector-specific exposure.

14. CAREIT’s initial portfolio spans Singapore, the UK, and Australia, backed by Centurion Corporation. How important is the sponsor’s support, and what risks come with this diversification?

Kenny: Sponsor backing is critical—it provides operational know-how, acquisition pipeline, and capital access. Geographic diversification balances local risks but introduces FX and regulatory uncertainties.

15. Considering the new indices, the Fed cut, and CAREIT’s IPO, how should investors position themselves over the next 12–18 months?

Kenny: Diversify with mid-cap and REIT-focused index ETFs, overweight S-REITs to capture refinancing and rate-cut benefits, and consider niche high-yield plays like CAREIT. This mix balances income, growth, and recovery potential in Singapore’s evolving market.

Note: The above analysis are my own personal views and are NOT buy or sell recommendations. Investors who would like to leverage my extensive research and years of Singapore REIT investing experience can approach me separately for a REIT Portfolio Consultation.

Listen to his previous market outlook interviews here:

2025

2024

2023

2022

2021

2020

Kenny Loh is an Associate Wealth Advisory Director and REITs Specialist of Singapore’s top Independent Financial Advisor. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to achieve an optimal risk adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and also invited speaker of REITs Symposium and Invest Fair.  

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

Continue ReadingMoney and Me: S-REITs in the Spotlight — Rate Cuts, New Indices, and the Next Wave of Growth

Centurion Accomodation REIT IPO: Prospectus & Summary

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I attended the Analyst Presentation for Centurion Accommodation REIT on 19 September 2025, where I had the opportunity to engage with both the CEO and CFO. It was an insightful session that offered valuable perspectives on the REIT’s strategy and growth outlook.

centurion

Overview

Centurion Accommodation REIT (CAREIT) is launching an initial public offering (IPO) on the SGX Mainboard to raise approximately S$771.1 million, marking Singapore’s first pure-play purpose-built living accommodation REIT. The Offering consists of 262.2 million units priced at S$0.88 per unit for investors. Cornerstone investors, including global and regional real estate funds and long-only institutions such as FIL Investment Management, abrdn Asia, UBS, Eastspring, and others, have subscribed to 614.0 million units (35.7%) of the total issued units.

The Sponsor, Centurion Corporation Limited, will retain a significant stake of ~45.8% post-IPO (assuming no over-allotment). Trading of the units is expected to commence on 25 September 2025 at 2:00 p.m.

Prospectus | Product Highlights Sheet

Fundamental and Financial Ratios

  • Type: Purpose-Built Workers Accommodation (PBWA) & Purpose-Built Student Accommodation (PBSA)
  • Sponsor: Centurion Corporation Limited
  • REIT Manager: Centurion Asset Management Pte. Ltd.
  • Total Units in Issue: ~1.72 billion (post-IPO, including cornerstone units)
  • Units Offered: 262,160,900 (Placement & Public Offer, excluding cornerstone tranche)
  • Portfolio: 14 properties initially, expanding to 15 with EPIISOD Macquarie Park
  • Geographic Presence: Singapore, United Kingdom, Australia
  • Portfolio Size: S$1.84 billion (Initial Portfolio); S$2.12 billion (Enlarged Portfolio)
  • IPO Offer Price: S$0.88 per unit
  • NAV per Unit: ~S$0.84 (calculated)
  • Price / NAV: ~1.05x (approx.)
  • Gearing Ratio: 20.9% (IPO, Initial Portfolio); ~31.0% (post EPIISOD acquisition)
  • Forecasted Distribution Yield: 7.47% (FY2026), 8.11% (FY2027)
  • Distribution Policy: 100% of distributable income (initial years); semi-annual distributions

Lease Management Ratios

  • Occupancy (PBWA): 97.9% average (FY2022–FY2024)
  • Occupancy (PBSA): 94.1% average (FY2022–FY2024)
  • Tenant Retention (PBWA): ~85.2%
  • Brands: Westlite (PBWA), Dwell and EPIISOD (PBSA)
  • Rental Growth CAGR: 26.3% (PBWA, FY2022–2024), 11.3% (PBSA, FY2022–2024)

Debt Management Ratios

  • Aggregate Leverage: 20.9% post-IPO; ~31.0% post-EPIISOD acquisition
  • Interest Coverage Ratio (ICR): 4.7x, 6.7x, 7.1x*
  • Interest/Debt Cost: 4.16%, 4.12%, 4.11%*
  • Debt Maturity: No maturities in the first 2 years; earliest in 2028

IPO Information

  • IPO Offer Price: S$0.88 per unit
  • Offer Closing Date: 23 September 2025, 12:00 p.m.
  • Listing Date: 25 September 2025, 2:00 p.m.

*Forecast Period 2025, Projection Year 2026 and Projection Year 2027 respectively

Portfolio Overview

With the acquisition of Epiisod Macquarie Park in Sydney, the Enlarged Portfolio will expand to 15 properties valued at ~S$2.12 billion, offering 27,602 beds across three markets.

The REIT targets resilient demand from Singapore’s foreign worker housing market and the UK/Australia student housing sectors, all of which face supply constraints and steady rental growth. CAREIT is positioned for both organic growth (asset enhancements, rental escalations) and inorganic expansion (via Sponsor’s right-of-first-refusal pipeline).

 

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.

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

Continue ReadingCenturion Accomodation REIT IPO: Prospectus & Summary

Singapore REITs Investment Forum with The Edge Singapore

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𝐑𝐄𝐈𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐅𝐨𝐫𝐮𝐦 𝐛𝐲 𝐓𝐡𝐞 𝐄𝐝𝐠𝐞 𝐒𝐢𝐧𝐠𝐚𝐩𝐨𝐫𝐞 – 𝐀 𝐏𝐨𝐰𝐞𝐫𝐟𝐮𝐥 𝐄𝐱𝐜𝐡𝐚𝐧𝐠𝐞 𝐨𝐟 𝐏𝐞𝐫𝐬𝐩𝐞𝐜𝐭𝐢𝐯𝐞𝐬

Honored to be part of this insightful REIT Investment Forum organized by The Edge Singapore, where industry leaders and experts came together to share diverse views on the evolving landscape of Singapore REITs.

Bridging the Confidence Gap: Building Trust in Overseas-Focused REITs

Over the past few years, I’ve observed a recurring theme whenever I speak with investors about overseas-focused REITs: the confidence gap.

When we look at Singapore-listed REITs with local assets, it feels natural—we can see the malls, walk through the offices, and even dine in the hotels. That familiarity builds comfort. But when it comes to REITs holding overseas properties, the same comfort is missing. Instead, questions arise:

  • How do I know the assets are really of quality?

  • What are the rules, taxes, and risks in those countries?

  • Will foreign exchange wipe out my yield?

These concerns are valid. Yet, overseas REITs are also where investors can find diversification, resilience, and attractive long-term opportunities. The key lies in how trust is built and sustained between managers and investors.

1. The Familiarity Gap Is Real

Local properties are tangible. Investors know their value intuitively. With overseas portfolios, distance creates uncertainty. This “familiarity gap” is the biggest hurdle that global REITs must overcome.

The solution? Transparency and communication.
Managers need to go beyond quarterly reports—regular property updates, virtual site tours, tenant case studies, and even on-the-ground insights go a long way in helping investors see what they own.

2. Governance and Alignment Matter More Overseas

When investors cannot physically verify the properties, management credibility becomes the anchor of trust.

What investors want to see is clear alignment:

  • Managers protecting DPU and yields.

  • Prudent debt management with a clear refinancing roadmap.

  • Honest, timely communication—especially in tough quarters.

When managers demonstrate alignment with unitholders, investors are more willing to back overseas expansion strategies.

3. Forex and Interest Rate Risks Can’t Be Ignored

Two of the biggest concerns for global REITs are currency volatility and rising refinancing costs.

  • At the REIT level, the impact depends on how well operating income, debt, and distributions are matched in the same currency. Effective hedging strategies also reduce noise.

  • At the investor level, Singapore investors must remember that distributions may be converted back into SGD—creating another layer of FX risk.

Rates are another layer. As we head into a potential rate cut cycle, borrowing costs may ease. But strategy shouldn’t swing entirely on rate outlooks—what matters is whether a REIT’s capital structure is resilient across cycles.

4. Yield Is the Outcome, Not the Thesis

Many investors chase high yields overseas, sometimes 8–10%. But yield alone should never be the reason to invest.

The real question: Is the DPU sustainable and growable?
Look deeper into:

  • Lease expiry profile and tenant quality.

  • Sector-specific risks in that geography.

  • FX hedging and debt maturity ladders.

  • The REIT’s ability to recycle capital or grow assets accretively.

A headline yield may be a signal, but it’s also a potential siren.

5. A Practical Investor Checklist

Before adding an overseas REIT into your income portfolio, I recommend asking:

  1. Visibility: Do you have access to clear, updated information about the assets and tenants?

  2. Governance: Does the manager communicate openly and align incentives with unitholders?

  3. Currency Map: Are income, debt, and distribution currencies aligned? Is there a hedging policy?

  4. Debt Profile: What does the refinancing ladder look like in the next 2–3 years?

  5. DPU Drivers: Where will growth or stability come from?

  6. Portfolio Fit: How does it add diversification in geography, sector, or currency?

Final Thoughts

Overseas-focused REITs will continue to be an important part of the Singapore market. They offer opportunities for diversification, growth, and attractive yields—but only when investors can invest with clarity and conviction.

As both an advisor and investor, I believe bridging the confidence gap requires effort on both sides. Managers must be more transparent and aligned; investors must adopt a structured framework to evaluate opportunities beyond our borders.

At REITsavvy, my mission is to help investors cut through the noise, ask the right questions, and build portfolios that are both resilient and income-generating.

Overseas investing isn’t about blind faith—it’s about informed confidence. And when that confidence is built, global REITs can become a powerful engine for long-term passive income.

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.

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

Continue ReadingSingapore REITs Investment Forum with The Edge Singapore