S-Reits Lead Market Gains as Lower Rates Lift Sentiment — But Small and Mid-Caps Say Their Value Remains Underappreciated
Singapore’s real estate investment trusts (S-Reits) are on track for their strongest annual performance since 2019, buoyed by easing interest rates and resilient operating fundamentals. Yet beyond the large-cap recovery, many smaller and mid-sized Singapore-listed companies say they continue to struggle with visibility and investor engagement — a gap the Monetary Authority of Singapore (MAS) now hopes to close with a new S$30 million Value Unlock programme.
S-Reits Post Best Run in Six Years
As at Friday (Dec 5), the iEdge S-Reit Index has risen 9.3 per cent year to date, with dividend distributions lifting total returns to 14.7 per cent. The index last achieved similar strength in 2019.
Market gains were broad-based: 29 of 33 constituents delivered positive returns, and the top 10 generated total gains above 20 per cent. Strong performers included CapitaLand Integrated Commercial Trust, OUE Reit, Mapletree Pan Asia Commercial Trust (MPACT), and Suntec Reit.
Operationally, S-Reits reported stable occupancy and positive rental reversions across retail, industrial and office segments. UOB Kay Hian analyst Jonathan Koh said most Q3 results met or exceeded expectations, supported by a more benign interest rate environment.
Rate Cuts Ease Pressure on Borrowing Costs
With the US Federal Reserve cutting rates five times this year — including 25 basis point reductions in both September and October — funding conditions have improved. Markets widely expect another cut at the Fed’s Dec 10 meeting.
Singapore’s borrowing benchmark, the three-month compounded SORA, has also fallen sharply from 3.02 per cent in January to 1.25 per cent on Dec 4.
These tailwinds have filtered into results:
Gerald Wong, founder of investment advisory platform Beansprout, said falling rates “visibly improved S-Reits’ performance”, adding that tighter spreads on long-dated debt signal healthier capital market conditions heading into 2026.
Fitch Ratings expects S-Reits to accelerate asset rejuvenation works as borrowing costs moderate. Portfolio enhancement capex could rise 20–25 per cent this year, especially in prime logistics, retail and office sectors where demand is strengthening.
But the Broader Market Outperforms
Despite the rebound, S-Reits still lag the wider Singapore market, with the Straits Times Index delivering total returns above 25 per cent over the same period.
Koh from UOB Kay Hian maintains an “overweight” call, noting S-Reits’ stable cash flows anchored by long leases. Still, he said the sector is unlikely to lead any market correction even as it continues to catch up.
Small and Mid-Caps Seek Visibility as MAS Rolls Out Value Unlock Programme
While S-Reits regain momentum, many small and mid-cap companies say their valuations remain depressed despite strong fundamentals — largely due to limited analyst coverage, unfamiliarity with niche business models, and underinvestment in investor relations.
This is where MAS’s new Value Unlock programme, part of a broader equity market development review, aims to step in.
‘Investors Don’t Understand Our Business Model’
Companies say the biggest hurdle is explaining what they actually do.
Francis Chang, CEO of RH Petrogas, said the upstream oil and gas producer often struggles to attract attention in a market with limited exposure to pure-play commodity firms. Most SGX-listed energy-related companies, he noted, operate in offshore and marine services instead.
Engineering solutions provider Nordic Group said the initiative could help investors appreciate its diversified footprint across marine, semiconductor and defence sectors — and better understand its combined turnkey and long-term maintenance model.
Evolve Capital, a sponsor and manager for SGX listings, said many fast-growing or niche businesses lack a clear equity narrative. “This is where strong investor relations becomes a value-creation function, not merely a compliance function,” it said.
Investor Relations Often Underdeveloped
Many smaller firms also admit they have historically underinvested in investor engagement due to resource constraints.
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LMS Compliance CEO Dr Louis Ooi said sustained investor engagement remains a major challenge.
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Lincotrade CEO Jackie Soh said smaller caps often “overlook” investor outreach while managing day-to-day operations.
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Trendlines Group CEO Haim Brosh cited limited engagement, scarce analyst coverage and other market barriers.
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Marco Polo Marine said better articulation of its growth strategy could improve investor understanding and valuations.
“People cannot buy what they do not know exists,” Soh said.
Grants to Strengthen Strategy and Engagement
The Value Unlock initiative provides S$30 million in co-funding under two grants — Equip and Elevate — covering areas such as capital optimisation, IR capability-building, corporate strategy and communication.
Companies assessing or considering applications include:
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Lincotrade (studying relevant grants)
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Reclaims Global (considering both grants)
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Wee Hur Holdings (evaluating support for IR, strategy and governance)
Dr Ooi said the structured support is especially useful for Catalist-listed firms seeking to professionalise investor relations “without placing undue strain on operational budgets”.
Early Movers Already Seeing Results
Several small and mid-caps have stepped up IR efforts even before the grants take effect — and their share prices reflect it.
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Wee Hur Holdings expanded engagement channels, including earnings calls, analyst sessions and targeted meetings. Its shares are up 69 per cent year to date.
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Reclaims Global engaged an IR firm to coordinate non-deal roadshows and media outreach. Its stock has risen more than 50 per cent this year.
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Thakral Corp maintains regular meetings with analysts and investors. Its share price has surged nearly 150 per cent in 2024.
These examples, market watchers say, demonstrate that investments in communication, transparency and outreach can meaningfully improve how the market values smaller companies.
A Two-Speed Market — And What Comes Next
The contrasting fortunes of S-Reits and small to mid-cap companies highlight a two-speed market:
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Large-cap Reits are benefiting from rate cuts and stable income streams.
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Smaller caps, despite often-strong fundamentals, continue grappling with visibility challenges.
With MAS rolling out targeted support to help companies articulate clearer value propositions, analysts say the reforms could help close this longstanding perception gap.
Whether these measures translate into sustained re-rating momentum, however, may depend on companies’ willingness to invest meaningfully in investor relations — and in telling their equity story to an audience that has, until now, been slow to listen.
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