Singapore REITs Show Resilience in 3Q2025 as Recovery Broadens; Analysts Turn More Positive on Sector
Singapore REITs (S-REITs) posted “resilient performance” in 3Q2025, buoyed by stable operating metrics and steady distributions, according to Maybank Securities analysts Krishna Guha and Liu Miaomiao. Even segments that had lagged — including overseas offices and China logistics — showed early signs of recovery, with Australia office occupancies improving across CapitaLand Integrated Commercial Trust (CICT), Suntec REIT and Keppel REIT.
UOB Kay Hian analyst Jonathan Koh adds that tight office supply in Singapore continues to support rental reversion. Keppel REIT is targeting double-digit positive rental reversion in both 2025 and 2026, having already refilled 73% of space vacated by BNP Paribas at Ocean Financial Centre.
Speculation Over a CapitaLand–Mapletree Megamerger
Market chatter intensified during the quarter over a possible merger between CapitaLand Investment and Mapletree Investments. Koh notes that if such a deal materialises, CICT could acquire Mapletree Pan-Asia Commercial Trust (MPACT). CICT’s office occupancy rose to 96.2%, aided by contributions from ION Orchard and CapitaSpring.
MPACT’s VivoCity continued to show strength, with 14.1% rental reversion and 4.8% growth in tenant sales, despite ongoing enhancement works. Its Mapletree Business City asset delivered 4.2% NPI growth, though rental reversion was slightly negative.
Mixed 2QFY2026 Results Across Mapletree REITs
Mapletree Industrial Trust (MINT) and Mapletree Logistics Trust (MLT) both reported weaker DPUs, down 5.6% and 10.5% y-o-y respectively. Excluding these two, REITs under Maybank’s coverage saw average DPU growth of 1.5%.
Most REITs beat or met expectations, though Keppel REIT, Keppel DC REIT and CDL Hospitality Trusts (CDLHT) fell short. Debt-hedging ratios have risen, and some refinancing is taking longer than expected, though overall valuations remain resilient despite FX-driven NAV declines.
Singapore’s macro conditions remain supportive: the three-month SORA has eased to 1.24%, GDP growth expectations have risen to 4.1%, and the sector still offers a healthy 370-bp yield spread over 10-year government bonds.
Maybank’s top picks remain: CICT, CapitaLand Ascendas REIT (CLAR), CapitaLand Ascott Trust (CLAS), MLT, MPACT and Parkway Life REIT (PREIT).
Rental Reversion, Data Centres and Logistics Diverge
Koh notes strong demand for data centres, with tight vacancy in Singapore. Keppel DC REIT delivered 10% positive rental reversion in 3Q2025 and plans to invest $53.9 million to expand capacity at SGP8.
FLCT reported standout logistics performance, achieving rental reversions of 49.7% in New South Wales and 55.7% in Victoria, with Australia logistics occupancy rising to 100%. Meanwhile, MLT continued to face pressure in China, posting a ninth consecutive quarter of negative rental reversion, though the decline moderated to –3.0%.
Falling Debt Costs Provide Tailwind
With the US Federal Reserve cutting rates to 3.75%, borrowing costs are easing. MPACT issued $200 million in seven-year green notes at 2.45%, while CICT priced $300 million at 2.25%. Koh notes meaningful reductions in cost of debt across several REITs, including CDLHT, LREIT and Keppel DC REIT.
He recommends investors accumulate laggard S-REITs, arguing they are likely to “catch up” as rates fall and are unlikely to lead declines during corrections. Koh remains overweight on CLAR, CLAS, Keppel DC REIT, Keppel REIT and LREIT.
Portfolio Rejuvenation Set to Accelerate
According to Fitch Ratings, REITs are expected to intensify acquisitions, divestments and AEIs as financing costs moderate. MINT and FLCT have the strongest headroom for growth. Conversely, MLT — with China logistics challenges and higher leverage — is likely to be more selective, while ESR REIT may divest $250–$350 million in non-core assets. CLINT has the least rating cushion due to sizeable development pipelines in India.
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