Broker Name: OCBC Investment Research
Date of Report: 26 November 2025
Excerpt from OCBC Investment Research report.
Report Summary
- OCBC Investment Research sees three key themes for Singapore REITs in 2026: (1) Distribution per unit (DPU) growth is expected to inflect upwards, but with divergent outcomes across REITs; (2) Capital recycling is set to accelerate, supported by improved cost of equity and stable credit metrics; (3) Investors are advised to adopt a defensive tilt amid ongoing macroeconomic uncertainties, with retail and logistics/industrial (especially data centres) as the preferred sub-sectors.
- S-REITs underperformed the broader Singapore market in 2025, with future performance highly dependent on the pace of interest rate cuts and bond yield movements.
- Sector valuations are seen as undemanding, with the forward price-to-book ratio and distribution yield spread above historical averages. Top picks include CapitaLand Ascendas REIT, CapitaLand Integrated Commercial Trust, Keppel DC REIT, Parkway Life REIT, and CapitaLand India Trust.
- Retail REITs are favoured for their resilience and positive rental reversions in Singapore, while logistics/industrial assets continue to benefit from healthy demand and rental growth. Office fundamentals remain strong with tight supply and rising rents, but hospitality REITs are the least preferred due to cyclicality and weaker recent performance.
- Quality, balance sheet strength, and meaningful exposure to Singapore assets are emphasised for stock selection. Mid-cap ideas for potential EQDP beneficiaries include Parkway Life REIT, CapitaLand India Trust, and OUE REIT.
Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Investment Research can be the first to access the full report from the OCBC Investment Research website : https://www.ocbc.com/personal-banking/investments/research-reports
