Broker: UOB Kay Hian
Date of Report: 26 August 2025

Singapore REITs Poised for Upswing: Full Sector Breakdown, Top Picks, and Key Financials

Sector Overview: Singapore REITs Enter an Upturn with Strong Catalysts

Singapore’s Real Estate Investment Trusts (REITs) are set for a robust upturn, powered by resilient domestic consumption, easing US monetary policy, and sector-specific catalysts. In the latest results round-up, only two out of 21 covered S-REITs beat expectations: CapitaLand Integrated Commercial Trust (CICT) and Parkway Life REIT (PREIT). Most others met forecasts, with a handful falling short due to sector challenges or transitional factors. UOB Kay Hian maintains an OVERWEIGHT rating across all segments, highlighting blue-chip S-REITs with strong catalysts as top buys.

Key Sector Ratings and Top REIT Picks

All major REIT sub-segments (Retail, Office, Hospitality, Industrial, Data Centre, Logistics, Healthcare) are rated OVERWEIGHT. UOB Kay Hian’s top picks for yield and growth include CLAR, CLAS, KDCREIT, KREIT, and LREIT.

Retail REITs: Suburban Strength and Positive Rental Reversions

– Retail REITs, particularly those with suburban malls, remain resilient, supported by domestic consumption and government vouchers (CDC, SG60). – Frasers Centrepoint Trust (FCT) achieved 8–9% rental reversion for FY25, maintaining full occupancy in North region malls. – LREIT posted a 10.2% rental reversion, driven by high single-digit growth at 313@Somerset and low teens at Jem. – Jem’s valuation rose 2% in Singapore, while Sky Complex in Milan increased 8.7% on euro strength. – FCT plans holistic asset enhancements (AEI) at Northpoint City, leveraging sponsor Frasers Property’s acquisition of adjacent levels at Yishun 10.

Office REITs: Tight Supply Drives Double-Digit Rental Growth

– Keppel REIT (KREIT) enjoyed positive rental reversion of 12.3% in 1H25 across Singapore (11.8%), Australia (>25%), South Korea (30%), and Japan (high single digits). – KREIT backfilled 73% of space vacated by BNP Paribas at Ocean Financial Centre and fitted out four suites in Sydney post-AEI. – Management expects double-digit rental reversion for the full year.

Diversified Commercial REITs: Singapore Properties Outperform

– CICT’s net property income (NPI) margin expanded to 73.6% in 1H25 from 72.7% in 2024, thanks to cost controls and scale. – CICT plans AEI for Tampines Mall and Lot One Shoppers’ Mall in 4Q25. – Mapletree Pan Asia Commercial Trust (MPACT) saw VivoCity drive NPI growth (6% yoy) and 14.7% rental reversion in 1QFY26; AEI at Basement 2 will deliver a 10% ROI by end-2025. – Discussions are ongoing for a new tenant to take up vacated space at Mapletree Business City.

Hospitality REITs: Currency Headwinds and Strategic AEIs

– Singapore’s strong currency caused a temporary slowdown; CLAS’ portfolio RevPAU rose 3% yoy to S\$159, led by Australia (+15%), UK (+4%), and US (+8%). – Average occupancy improved by 3ppt to 78%. – CLAS executed three new AEIs, totaling five ongoing projects. – Far East Hospitality Trust (FEHT) reduced rates to preserve occupancy at 79.8%, leading to a 4.6% decline in average daily rate. – Four Points by Sheraton Nagoya acquisition contributed S\$1.6m in 2Q25. – FEHT maintains low leverage (32.8%) with S\$330m debt headroom.

Data Centre REITs: Unmatched Rental Growth in Singapore

– Keppel DC REIT (KDCREIT) posted a 51% positive rental reversion in 1H25, mainly from colocation leases at SGP4 (11% of rental income). – Management expects continued high single- to low double-digit rental reversion in 2026. – Digital Core REIT’s Los Angeles occupancy improved 2ppt to 87.7% in 2Q25, serving 60–70 enterprise clients. – Plans are underway to refurbish and re-lease a data centre in Northern Virginia, which was 25% under-rented.

Logistics REITs: Australia Surges, China Faces Headwinds

– Frasers Logistics & Commercial Trust (FLT) delivered 55.8% rental reversion for new/renewal leases in 3QFY25. – Rapid backfill of vacant space at Tuas South Link 1 signals strong demand in Singapore. – Mapletree Logistics Trust (MLT) secured 2.1% rental reversion in 1QFY26, led by Singapore (+5.2%) and Japan (+7.2%); China saw a -7.5% decline, with full-year nationwide rents expected to fall 9.5% in 2025.

Diversified Industrial: CLAR’s Development Focus

– CLAR’s occupancy ticked up 0.3ppt to 91.8% in 2Q25, benefiting from backfilling two logistics assets in Sydney. – Acquisition of 9 Tai Seng Drive (yield: 7.1%), with potential rent uplift (currently 30% under-rented). – Eight active projects span developments, redevelopments, and AEIs in Singapore, the US, and UK, worth S\$850m.

Macroeconomic Catalysts: Rate Cuts and Flight to Quality

– The US Federal Reserve is expected to cut rates in 2H25 and again in 2026, supporting economic growth. – Singapore’s safe-haven status is underscored by a fiscal surplus and the lowest reciprocal tariff (10%) in the region. – Three-month compounded SORA dropped 133bp to 1.74% YTD; 10-year bond yields compressed 98bp to 1.88%. – Yield spreads for S-REITs have expanded to 3.82%, approximately 1 standard deviation above the long-term mean.

Risks and Assumptions

– Risks include secondary tariffs imposed on Russia, leading to punitive tariffs on China and India for energy purchases. – DPU forecasts are maintained.

Vital Statistics: Top 20 S-REITs by Market Capitalisation

Summary of Financial Results: Performance at a Glance

Conclusion: S-REITs Set to Benefit from Rate Easing and Sector Tailwinds

Singapore REITs are well-positioned for growth, underpinned by resilient local demand, strong catalysts in key sectors, and imminent rate cuts. The sector’s yield spread has expanded, making S-REITs attractive for both income and growth investors. Top picks CLAR, CLAS, KDCREIT, KREIT, and LREIT offer compelling opportunities, backed by robust fundamentals and strategic asset management. With limited new supply in retail and logistics, and Singapore’s status as a fiscal safe haven, the outlook remains bullish for the months ahead.