S-Reits with lowest relative gearing have an average ratio of 33.5%
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. SGX RESEARCH
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
6 hours ago
- Business Times
Meme-stock roar fades on Wall Street as retail finds new thrills
[NEW YORK] It was once a symbol of rebellion against the well-heeled Wall Street establishment. Today, it's just another day in markets. This week proved the point. Opendoor surged 43 per cent in a single day. Krispy Kreme rallied 39 per cent in a matter of hours. GoPro briefly spiked 73 per cent. Reddit message boards lit up once again with rocket emojis and call-option bravado. Yet it was not the magnitude of the surges that mattered, but the indifference they met. Customary warnings about speculative excess fell on deaf ears. What once felt seismic now feels like a normal part of daily trading, another episode in a US financial system where bursts of retail speculation are routine, expected, and largely unremarkable. By the end of the week, with the quick rallies faded, the broader market ended with modest moves after a record-setting run. Meanwhile, crypto – once cast as the financial resistance – continued its steady march into the mainstream. A new blockchain-based project involving the likes of Bank of New York Mellon and Goldman Sachs was announced. Crypto funds posted their biggest four-week cumulative inflow ever. Michael Saylor's Strategy clinched another US$2.8 billion in capital markets to fund additional Bitcoin buying. Taken together, the week offered a broader lesson: retail-driven speculative behaviour no longer signals generational angst or post-pandemic distortion. It has instead become a settled feature of the current cycle. Short-dated options are part of the retail toolkit, trading platforms span everything from sports betting to complex stock bets, and manic episodes rarely require justification to take hold. 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 Peter Atwater, an adjunct professor at the College of William & Mary who studies retail investors, said the current wave of activity reflects a shift in both market sentiment and investment toolkit. Meme stocks trading, he says, has lost its sense of novelty – and that's precisely the point. 'We have normalised memeing,' he said. 'There's a yawn to it now.' In Atwater's view, the most aggressive traders have already moved on to riskier frontiers – digital tokens, leveraged ETFs, prediction markets, while meme stocks have become more of a cultural rerun. 'It's like 30-year-olds dancing to music 20-year-olds used to party to,' he said. That meme stocks can rip without stimulus checks, lockdowns or zero rates is not especially surprising anymore. It is, in its own way, a marker of the moment: everyday speculation, embedded in the architecture of modern markets. Contracts that expire within 24 hours made up a record 62 per cent of the S&P 500's total options so far this quarter, according to data compiled by Cboe Global Markets, with more than half of the activity being driven by retail trading. 'This generation is far savvier about options and market structure,' said Amy Wu Silverman, head of derivatives strategy at RBC Capital Markets. 'While my generation was perhaps taught to 'buy a house' this one knows to 'buy the dip.'' It's not happening in a vacuum. This week's earnings season offered few surprises. Tariff deadlines slipped again. Noise from the White House blurred into the investment backdrop. The S&P 500 climbed 1.5 per cent on the week and closed at a record high. And in the end, a group of volatile stocks became yet another playground where regular investors aimed to quickly turn a profit, often by cornering short sellers or leveraging options. Opendoor Technologies capped a six-day winning streak with a 43 per cent pop on Monday. The following days saw stocks with high short interest, such as Kohl's, GoPro, Krispy Kreme and Beyond Meat surge intraday then pare into the close. Competition for gambling US dollars is more brisk than it used to be. Since the post-Liberation Day sell-off, a Goldman Sachs basket of the most shorted stocks has jumped more than 60 per cent. In credit, CCCs, the riskiest tier of the junk bond universe, are on track to rack up a seventh week of gains. Crypto funds took in US$12.2 billion in the past four weeks, their biggest cumulative inflow for such a period, according to Bank of America, citing EPFR Global data. The US leveraged-loan market just had one of its busiest weeks ever with junk-rated companies rushing to reprice their borrowings multiple times. And while the latest frenzy was reminiscent of 2021's pandemic-era burst, there were a few key differences. This week's action was fleeting, lasting one or two trading days before petering out. Concerted campaigns in the options market played a smaller role. More than half of the top 100 stocks in the S&P 500 index were trading with inverted one-month call skew in 2021, a sign of bullish intent, according to Cboe. This week it got only as high as 21 per cent for the group. 'The market makers and institutions have really adjusted to this phenomenon,' said Garrett DeSimone, head quant at OptionMetrics. They are 'able to hedge their risk and they know how to price these options in across these scenarios', he said. If it signalled anything, enthusiasm for memes is more evidence that an ever-more-empowered retail cadre is a fact of Wall Street life that is not going anywhere, at least not soon. 'I don't think it's the beginning of a new trend, but it is very interesting to watch because it speaks that the retail investor really wants to be involved in this market,' said Jay Woods, chief global strategist at Freedom Capital Markets. 'This is bullish. This is not bearish. This is not significant of a top.' BLOOMBERG
CNA
9 hours ago
- CNA
S&P 500, Nasdaq close at records; Deckers soars on UGG demand
The S&P 500 and Nasdaq notched record high closes on Friday, lifted by optimism the U.S. could soon reach a trade deal with the European Union, while Deckers Outdoor surged following a strong quarter for the maker of UGG boots and Hoka sneakers. European Commission President Ursula von der Leyen will meet U.S. President Donald Trump on Sunday in Scotland after EU officials and diplomats said they expected to reach a framework trade deal this weekend. Trump said earlier that the odds of a U.S.-EU trade deal were "50-50". Deckers Outdoor soared 11 per cent after results beat quarterly estimates, with strong demand in international markets. Intel tumbled 8.5 per cent after the chipmaker forecast steeper quarterly losses than expected and announced plans to slash jobs. Wall Street has surged to record highs in recent weeks, thanks to upbeat quarterly earnings, trade deals with Japan and the Philippines, and expectations that the White House will cement more agreements to avoid elevated tariffs threatened by Trump. "The market has been anticipating that the deals are going to get done," said Thomas Martin, Senior Portfolio Manager at GLOBALT in Atlanta. "Personally, I have a bit more skepticism. You've got to be careful, because if they don't get done, there is more room for disappointment than there is upside." The S&P 500 climbed 0.40 per cent to end the session at 6,388.64 points. The Nasdaq gained 0.24 per cent to 21,108.32 points, while the Dow Jones Industrial Average rose 0.47 per cent to 44,901.92 points. Nine of the 11 S&P 500 sector indexes rose, led by materials, up 1.17 per cent, followed by a 0.98 per cent gain in industrials. For the week, the S&P 500 climbed 1.5 per cent, the Nasdaq added 1 per cent and the Dow rose 1.3 per cent. The S&P 500 set a closing record every day this week. The last time the index had a "perfect week" of closing highs, Monday through Friday, was in November 2021, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Investors next week will focus on the U.S. Federal Reserve, with policymakers on Thursday expected to hold interest rates steady as the central bank weighs the impact of tariffs on inflation. Traders see about a 60 per cent chance of a rate cut in September, according to CME's FedWatch tool. Trump said on Friday he believed that Fed Chair Jerome Powell might be ready to lower rates. Trump made a rare visit to the Fed on Thursday after calling Powell a "numbskull" earlier in the week for failing to slash rates. Charter Communications slumped 18 per cent after the cable giant reported a deeper-than-expected broadband subscriber loss, hurt by competition from wireless carriers bundling high-speed internet services with 5G mobile plans. Paramount Global dipped 1.6 per cent after U.S. regulators approved its $8.4-billion merger with Skydance Media. Health insurer Centene rose 6.1 per cent after it said it expects to deliver improved profitability in its three government-backed healthcare insurance businesses in 2026. S&P 500 companies are expected on average to increase their second-quarter earnings by 7.7 per cent year over year, according to LSEG I/B/E/S, with most of those gains coming from heavyweight tech-related companies. Companies reporting next week include Microsoft, Apple, Amazon and Meta Platforms. Advancing issues outnumbered falling ones within the S&P 500 by a two-to-one ratio. The S&P 500 posted 45 new highs and 6 new lows; the Nasdaq recorded 68 new highs and 54 new lows.
Business Times
11 hours ago
- Business Times
Navigating Asean's markets in H2: A balanced approach for a mixed outlook
GOING into the second half of the year, we see the market landscape of Asean presenting a mixed bag of opportunities and challenges. While monetary easing and clarity on US trade policies promise a brighter outlook for equities, lingering uncertainties may still affect earnings. With the probability of a US and global economic recession hovering at an elevated 40 per cent, challenges remain for economies from the Association of Southeast Asian Nations (Asean). The market's focus has been on reciprocal tariffs, but the game changer for Asean may be the outcome for exemptions on semiconductors, pharmaceuticals, and certain commodities – whether they will be sustained. For countries like Malaysia and Singapore, where 60 per cent of exports enjoy tariff exemptions, the ongoing investigations under Section 232 of the Trade Expansion Act of 1962 will also play a crucial role in raising the baseline for tariffs for the region. Monetary policy: a beacon of hope Rate cuts are expected to provide relief to sectors such as real estate and consumer staples, enhancing liquidity and spurring investment. For instance, Singapore's strategic S$NEER slope reductions have already lowered borrowing costs, benefiting real estate investment trusts (Reits) and potentially boosting local equity fund subscriptions. The Philippines, too, is poised for multiple rate cuts, with expectations of two more 25 basis point reductions. This move could lead to equity re-rating and bolster growth in consumer credit and real estate sectors. Trade policy clarity: a catalyst for confidence Clarity in trade policy could further bolster market performance. The recent US-Vietnam deal, which significantly reduced tariffs on domestically produced goods to 20 per cent, offers a blueprint for other Asean nations. This two-tier tariff system, with higher tariffs on transshipment goods and lower country-level tariffs, provides a clearer framework for trade negotiations. Such clarity could boost investor confidence and attract positive foreign direct investment flows into the region. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Indonesia and the Philippines had also agreed on a similar tariffs rate (19 per cent) with the US. Anticipation of similar deals for Thailand and Malaysia could further enhance investor confidence. Vietnam's stock market, for instance, has already rallied by over 9 per cent month-to-date. With strong government fiscal support and the potential reclassification of Vietnam to Emerging Market status on the FTSE in September, we have recently upgraded the country's market allocation from neutral to overweight. We expect this upgrade to attract more than US$500 million in inflows and spur positive sentiment in the stock market. Sectoral opportunities amid uncertainties In this evolving landscape, industrial real estate, ports, logistics companies, and tech producers emerge as sectors to watch. Vietnam's emphasis on science and technology development, coupled with infrastructure projects, positions its industrial and construction sectors for sustained growth. In the Philippines, the property market is poised for recovery, driven by attractive mortgage rates and infrastructure improvements. Reduced unsold inventory and lower vacancy rates in key CBD offices could also potentially drive positive rental reversion in 2026. In Singapore, sharp interest-rate cuts, high dividend yields and the Equity Market Development Programme make Reits and small to mid-cap stocks attractive. Navigating the challenges However, the path is not without hurdles. Persistent US inflation poses a downside risk for equities in the region. Rising terminal policy rate expectations, higher term premia and poor supply demand dynamics could lead to a substantial increase in US 10-year yields, prompting a reassessment of discounted cash flows and cross-asset volatility. This risk is particularly acute for manufacturing and export-oriented economies within Asean, which are highly exposed to global demand fluctuations. Geopolitical tensions continue to cast a pall over markets, with rising protectionism and trade wars disrupting economic stability and investor confidence. The ongoing scrutiny of transshipment practices and sectoral exemptions, such as those for semiconductors and pharmaceuticals, adds layers of complexity to trade negotiations and economic forecasts. With 'Liberation Day' tariffs set to take effect on Aug 1 for Asean countries that received Trump's letters, uncertainty looms large. Even if agreements are reached, effective tariffs are likely to settle higher than the current 10 per cent holding rate, with additional sectoral tariffs posing another downside risk. A balanced approach to growth In conclusion, while Asean grapples with global recession risks and geopolitical uncertainties, opportunities for growth remain through strategic monetary easing and trade policy advancements. Investors should adopt a balanced approach to risk management and investment strategy, focusing on high-quality, defensive assets with greater domestic exposure. The writer is head of Asia & co-head of global emerging markets equity strategy at JPMorgan
