Top S-Reits with lowest gearing ratios average 33.5% as investors await rate cuts
Market analysts now predict a 75-basis-point (bps) cut in 2025, up from the previously anticipated 50 bps.
Singapore real estate investment trusts (S-Reits) have delivered a commendable performance, closing the first half of 2025 with a 4.2 per cent total return, as indicated by the iEdge S-Reit Index. Over the past 12 months, S-Reits have delivered a 10.5 per cent total return.
Notably, the top 10 best-performing S-Reits have delivered double-digit returns in H1 2025. They include Frasers Hospitality Trust (21.5 per cent), CapitaLand Integrated Commercial Trust (14.3 per cent), Frasers Centrepoint Trust (11.4 per cent), CapitaLand Ascendas Reit (10.1 per cent) and Parkway Life Reit (10 per cent).
The iEdge S-Reit Index concluded H1 2025 at 1,021 and touched 1,030 on Jul 3, a level which was previously tested three times – in November 2024, January 2025 and April 2025. The consensus estimate target price for the next 12 months is pegged at 1,159.
From a balance-sheet standpoint, the S-Reit sector maintains an average gearing ratio of 40 per cent, reflecting prudent capital management; it is also well below the regulatory limit of 50 per cent.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
The 10 S-Reits with the lowest gearing ratios are Sasseur Reit , Aims Apac Reit , Keppel DC Reit , Far East Hospitality Trust , Frasers Hospitality Trust, Frasers Logistics & Commercial Trust , Parkway Life Reit, Starhill Global Reit , IReit Global and Mapletree Pan Asia Commercial Trust .
On average, these 10 have a gearing ratio of 33.5 per cent.
Sasseur Reit, notable for its low gearing ratio of 25.9 per cent for the first quarter of 2025, reported a slight year-on-year (yoy) dip of 0.2 per cent in its entrusted management agreement (EMA) rental income for the same period. This was primarily due to weaker foreign exchange rates and lower variable income. However, in renminbi terms, Q1 2025 EMA rental income saw a 1.6 per cent yoy increase.
The Reit's portfolio occupancy rate improved to 98.9 per cent, up from 97.9 per cent in the previous year, with higher occupancy recorded at its Chongqing Bishan and Kunming outlet malls in China. Its management remains committed to maintaining a healthy balance sheet to seize potential opportunistic acquisitions.
Sasseur Reit has the right of first refusal on two assets in Xi'an and Guiyang, and could also look for acquisition opportunities within other assets managed by its sponsor. As at Q1 2025, its sponsor Sasseur Group manages a total of 18 outlet malls, including the four properties owned by the group.
UOB Kay Hian research noted that the recent preference for quality names resulted in the three-month compounded Singapore Overnight Rate Average easing by 98 bps to 2.09 per cent in H1 2025. Despite this significant drop, there has been no positive price movement or re-rating for S-Reits. The research house expects broader recovery in liquidity from possible Fed rate cuts at the end of 2025 to lift the sector.
However, global geopolitical uncertainties and tariff risks remain in focus, and investors should stay nimble and watch data as they head into the second half of the year.
The writer is a research analyst at SGX. For more research and information on Singapore's Reit sector, visit sgx.com/research-education/sectors for the S-Reits & Property Trusts Chartbook.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
2 hours ago
- Business Times
Reit ETFs see 40% AUM growth in past year as S-Reits regain appeal
[SINGAPORE] Over the past 12 months, Singapore-listed real estate investment trust (Reit) exchange-traded funds (ETFs) have seen more than S$300 million in net new inflows, reflecting continued investor demand. The combined assets under management (AUM) of these ETFs have surged by 40 per cent over a year, reaching an all-time high of S$1.2 billion by the end of the first half of 2025. This growth in AUM has outpaced the Reit sector's price movements, as reflected by the iEdge S-Reit Index and FTSE EPRA Nareit Index which reported total returns of 10.5 per cent and 12.5 per cent respectively. Both retail and institutional investors have actively contributed to the growth of AUM for Reit ETFs in Singapore. On average, the five Reit ETFs have posted total returns of 10.7 per cent over the past year ended Jun 30, 2025. Trading activity for these Reit ETFs also surged by 34 per cent quarter on quarter for the April to June 2025 period. Among the top 10 traded ETFs listed in Singapore, the Lion-Phillip S-Reit ETF and the NikkoAM-StraitsTrading Asia ex Japan Reit ETF stood out, recording the highest net inflows. The Lion-Phillip S-Reit ETF, Singapore's first and largest ETF focusing on S-Reits, tracks the Morningstar Singapore Reit Yield Focus Index, which includes 21 constituents and boasts an AUM of more than S$540 million. As one of the two pure-play Singapore Reit ETFs, it offers a dividend yield of 5.8 per cent and achieved total returns of 4.1 per cent in the first half of 2025. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The NikkoAM-StraitsTrading Asia ex Japan Reit ETF tracks the FTSE EPRA Nareit Asia ex Japan Net Total Return Reit Index, consisting of 43 constituents across Singapore, Malaysia, Hong Kong, India, South Korea, Thailand and the Philippines. Singapore remains the largest exposure at 68 per cent of the portfolio. Notably, this ETF distributes quarterly dividends, unlike the others which distribute semi-annually. It ranks as the second-largest Reit ETF by AUM, with over S$420 million, yielding 5.8 per cent in dividends and generating total returns of 6.0 per cent in the first half of 2025. In terms of returns, the UOB Asia-Pacific Green Reit ETF was the best-performing Reit ETF for the first half of 2025, returning 9.3 per cent in total returns. The underlying index, the iEdge-UOB Apac Yield Focus Green Reit Index, emphasises environmental factors such as energy consumption, water consumption, GHG emissions and green building certifications. The index has 50 Reits across Australia (42 per cent), Japan (32 per cent), Singapore (19 per cent), and Hong Kong (7 per cent). The UOB Apac Green Reit ETF presents an option for investors seeking sustainable investments while maintaining highly competitive dividend yields. The CSOP iEdge S-Reit Leaders ETF has the highest dividend yield among the five Reit ETFs at 6 per cent. It tracks the iEdge S-Reit Leaders Index, which comprises 22 S-Reits. Phillip Securities research analyst Helena Wang recently initiated coverage on the Phillip SGX Apac Dividend Leaders Reit ETF for its exposure to 31 Reits in the Asia-Pacific ex Japan region, and its consistent dividend growth. The report highlighted that since 2021, dividends have remained steady between four and six Singapore cents per share. The ETF's book value has also become more attractive, historically trading at 1.3 times the price-to-book ratio, and now at 0.8 times. The ETF tracks the iEdge Apac ex-Japan Dividend Leaders Reit Index, which selects Reits based on their dividend payout. SGX RESEARCH The writer is a research analyst at SGX. For more research and information on Singapore's Reit sector, visit for the S-Reits & Property Trusts Chartbook.
Straits Times
7 hours ago
- Straits Times
After stock market's torrid run, earnings misses face punishment
A Wall Street plate is seen on a street vendor stall outside the New York Stock Exchange (NYSE) in New York City, U.S., July 11, 2025. REUTERS/Jeenah Moon NEW YORK – The second-quarter earnings season is off to a ripping start, with consumer strength powering resilient corporate profits. In the stock market, however, the reaction has been fairly quiet, an ominous sign that much of the good news is priced in – and investors are punishing disappointments. Take financials, which reported blockbuster numbers this week that failed to juice their shares. 'Financials have crushed 2Q earnings expectations with a 94.4 per cent per cent beat rate so far, yet stocks saw only muted reactions as investors largely anticipated the results,' Bloomberg Intelligence strategists Gina Martin Adams and Michael Casper wrote in a July 18 note. Similarly, streaming platform Netflix exceeded outlooks in every major metric, and United Airlines Holdings was upbeat about travel demand gaining steam. Yet, investors largely reacted to these numbers with a collective shrug. Netflix closed down over 5 per cent on July 18 despite its strong performance. 'With stock valuations where they are, all the good news is priced into the market now,' said Mr Greg Taylor, chief investment officer at PenderFund Capital Management. What's more, the market is penalising results that fall short of expectations by the most in nearly three years, data compiled by Bloomberg Intelligence shows. 'The margin of error here is small,' said Mr Michael Arone, chief investment strategist at State Street Investment Management. 'When the valuations are high and you miss, the punishment is more severe.' Combined profit and revenue beats, on the other hand, are being rewarded by only the most in a year. Top stories Swipe. Select. Stay informed. Singapore Tampines regional centre set to get more homes, offices and public amenities Multimedia How to make the most out of small homes in Singapore Life US tech CEO Andy Byron resigns after viral Coldplay 'kiss cam' video Asia From toy to threat: 'Killer kites' bring chaos to Indonesian airspace Opinion I thought I was a 'chill' parent. Then came P1 registration Singapore 'God and government are the only things beyond our control,' says Group CEO Business Me and My Money: He overcomes a $100k setback to build a thriving online tuition business Asia At least 34 killed as tourist boat capsizes in Vietnam's Halong Bay 'At an index level, good earnings are not likely the broad market catalyst investors are waiting for,' said Mr Julian Emanuel, chief equity and quantitative strategist at Evercore ISI. The S&P 500 Index closed near an all-time high on July 18, after notching seven new records in just 15 sessions. The equities benchmark is trading at 22 times expected 12-month profits and is fast approaching the level it hit in February, before April 2 when President Donald Trump unleashed his global tariffs that weighed on sentiment. This week, investors will get results from a slew of Big Tech giants including Alphabet and Tesla, industrial behemoth Honeywell International, chemicals maker Dow, defense contractors Lockheed Martin and Northrop Grumman, and auto manufacturer General Motors, among many others. Big US banks delivered an earnings bonanza based on record-breaking trading revenues, as the volatility sparked by Trump's tariff offensive ignited market activity at some of Wall Street's biggest firms. Still, the share moves were underwhelming. Goldman Sachs Group equities traders posted the largest revenue haul in Wall Street history, but the company's shares rose less than 1 per cent on the day it reported earnings. Even worse, Morgan Stanley's net revenue topped estimates and the shares closed down 1.3 per cent. And JPMorgan Chase & Co.'s stock traders notched their best second quarter ever, while fixed-income trading trounced expectations, yet the stock dropped 0.7 per cent. Still, market pros noted that the powerful bank earnings offer an encouraging indication for the overall economy. 'Banks can only be healthy when the economy is strong,' said Mr Mark Malek, chief investment officer at Siebert. 'So their earnings along with their commentary serve as a broader benchmark on economic health.' The durability of the US consumer has been a major question for investors and economists, especially in the face of still-high inflation, elevated interest rates and continued uncertainty about the new US trade regime. The initial signs are encouraging based on earnings from airlines to PepsiCo Inc. to Netflix to jeans-maker Levi Strauss & Co. 'The consumer remains strong,' Mr Malek said. 'That is paramount.' Travel in the US is recovering with the approval of Trump's tax cut and spending package and negotiators appearing to make progress in tariff discussions, Delta Air Lines Inc. Chief Executive Officer Ed Bastian said. PepsiCo's North American business improved and it saw strong growth in international markets. Netflix raised its full-year forecast. And Levi Strauss said it expects sales growth to outweigh the impact of Trump's tariffs. Retail sales figures on Thursday offered proof of this continued strength. Commerce Department data showed the value of retail purchases, not adjusted for inflation, increased 0.6% after declines in the prior two months, exceeding nearly all estimates in a Bloomberg survey of economists. 'So far it has been a thumbs up from earnings,' Malek said. 'While a big tariff-driven breakdown may still lurk in the shadows, the harbinger has not shown up yet.' Shares of PepsiCo and Delta have been the stark outliers this quarter, bringing in big gains after strong results. Both stocks were lagging the broader market significantly this year ahead of the numbers. With so many uncertainties still lingering – especially on tariffs, economic growth, inflation and the Federal Reserve's rate-cut plan – corporate outlooks will play a significant role in shaping investor confidence from here. 'The biggest question facing S&P 500 earnings is who bears the tariff bill,' said Mr Dec Mullarkey, managing director at Sun Life Investment Management. Second-quarter earnings estimates for the S&P 500 have been drastically reduced this year, with analysts expecting profits to rise 3.3 per cent from a year ago as of the last close, down from the 9.5 per cent growth expected at the beginning of the year. 'The bar is low,' said Ms Irene Tunkel, chief US equity strategist at BCA Research. 'Companies will likely clear it, but that's no longer enough. With valuations stretched, investors want strong guidance, and earnings misses will be punished fast.'
Business Times
a day ago
- Business Times
US: Stocks mixed as indexes struggle to retain record highs
[NEW YORK] Wall Street stocks closed mixed on Friday, with the S&P 500 and Nasdaq struggling to log significant gains as investors awaited further corporate results and remarks by the Federal Reserve chair next week. The Dow Jones Industrial Average slumped by 0.3 per cent to 44,342.19, while the broad-based S&P 500 Index was flat at 6,296.79. The tech-heavy Nasdaq Composite Index crept up 0.1 per cent to 20,895.66. 'Investors are gearing up for next week,' said Peter Cardillo of Spartan Capital Securities, noting that major brands like Coca-Cola, Tesla and Mattel are set to report their earnings. added in a note that 'a lack of major developments has kept the major averages drifting sideways since falling from session highs this morning.' For now, traders shrugged off a Financial Times report Friday that US President Donald Trump is pushing for a minimum tariff of 15-20 per cent on European Union products in any deal with the bloc. This would mark a higher level than the 10 per cent added tariff the EU - and most other US trading partners - are facing. Markets also digested the preliminary results of a University of Michigan survey, which found that consumer sentiment crept up to the highest value in five months in July, although still substantially below its historical average. Looking ahead to next week, traders will be eyeing Fed Chair Jerome Powell's remarks on Tuesday at a conference in Washington. AFP
