Latest news with #S-Reits
Business Times
6 days ago
- Business
- Business Times
US tariffs put spotlight on industrial S-Reits' upcoming H1 earnings
[SINGAPORE] Market watchers remain cautious on the performance of industrial Singapore-listed real estate investment trusts, or S-Reits, ahead of the sector's upcoming financial results – given uncertainty around the impact of the US administration's global tariffs. 'Rental growth in the industrial sector may ease in the current tariff-related uncertainty,' said Xavier Lee, an equity analyst from Morningstar. The US administration has set an Aug 1 deadline to conclude tariff negotiations with other countries. After that, exports to the US from these countries will face new tariffs, starting at a baseline rate of 10 per cent. However, Krishna Guha, analyst at Maybank Securities, said that the impact on the industrial sub-sector could be cushioned by the 'front-loading' of inventory – where suppliers stock up on inventory early – to mitigate changes in tariffs. Industrial S-Reits posted mixed figures in their most recent results. While Mapletree Logistics Trust saw its Q4 FY2025 distribution per unit (DPU) fall 11.6 per cent, CapitaLand Ascendas Reit posted a 3.2 per cent rise in its FY2024 H2 DPU. The reporting season for S-Reits kicks off on Jul 23 with Sabana Industrial Reit reporting its H1 business update after market close. Others include Digital Core Reit on the same day, as well as Suntec Reit on Jul 24. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up More counters will report their H1 financial results the following week, including Keppel Pacific Oak US Reit on Jul 29, Keppel Reit on Jul 30 and Capitaland Integrated Commercial Trust on Aug 5. S-Reits under the Frasers and Mapletree groups will be reporting their Q3 and Q1 results, respectively. Mapletree Industrial Trust will release its results on Jul 28 while Frasers Centrepoint Trust will report on Jul 24. Besides the industrial sector, Morningstar's Lee said that leasing demand for office S-Reits could also fall given the economic uncertainty from ongoing trade tensions. But unlike the industrial sector, the tight office supply in Singapore could offset weak demand for office spaces, he added. For the hospitality sector, Maybank's Guha was of the view that it may see some positive impact from recent concerts, although the US tariffs could weigh down business and leisure travel. Guha added that Singapore-focused S-Reits will have a 'home advantage' as they are sheltered from the impact of the broader growth slowdown due to trade tensions. More S-Reits to post DPU growth Overall, more S-Reits are likely to report growth in their DPU as they benefit from year-on-year interest cost savings, said Darren Chan, senior research analyst at Phillip Securities Research. He noted that S-Reits are benefiting from last year's US Federal Reserve rate cuts, which lowered borrowing rates by 100 basis points. The three-month Sora, an interest-rate benchmark for Singapore dollar loans, has also fallen below 2 per cent – its lowest level since 2022. 'Looking ahead, S-Reits are expected to enjoy further interest cost savings as more rate cuts are anticipated later this year,' said Chan. On the other hand, Morningstar's Lee believes that US Fed rate cuts may have limited impact on S-Reits this year. This is because most of these Reits have a larger share of fixed-rate debt, which is less sensitive to rate changes than floating-rate debt. Among the S-Reits covered by Morningstar, the proportion of fixed-rate debt ranges from 58 to 83 per cent of total debt. 'However, the lower interest rates should start becoming meaningful in the subsequent 12 to 18 months as S-Reits refinance expiring debt,' said Lee. Nevertheless, he agreed with other analysts that the majority of S-Reits will post positive DPU growth of between 1 and 7 per cent for FY2025. This will mainly be driven by a mix of organic improvements to S-Reits' portfolio and acquisitions, rather than interest cost savings, said Chan. Maybank Securities maintains its positive view of S-Reits on the back of falling interest rates and 10-year yield. These factors should support these Reits' distributions and valuation even if there is pressure on their revenue, said Guha. Maybank Securities prefers, in the following order: retail, office, industrial and hospitality sub-sectors.
Business Times
06-07-2025
- Business
- Business Times
Reit-owned malls more likely to forgo higher rents for right tenant mix
[SINGAPORE] For Singapore-listed real estate investment trusts (S-Reits), rent increases are tempered by longer lease terms, a need to curate tenant mixes to drive foot traffic, and a focus on keeping their tenants' businesses viable. These considerations set them apart from private commercial landlords, who may act more freely in setting rents, said analysts. Their comments come amid mounting concerns over surging retail rents. Headlines have spotlighted businesses facing steep rent hikes. Flor Patisserie, a local bakery, announced plans to shut its doors in April 2025, after its landlord raised the rent of its shophouse unit by nearly 60 per cent. The food and beverage (F&B) sector also saw a record number of closures last year, even as large China retailers expanded their footprint in malls. Analysts said such sharp increases in rent are more typical among private landlords or in prime locations within malls. They also noted that strata-titled properties and shophouses operate under different motivations from institutional landlords. According to real estate consultancy Cushman & Wakefield, prime retail rents in both the Orchard and suburban areas have slightly surpassed pre-pandemic levels. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The prime monthly rent for the Orchard area rose from S$35.77 per square foot per month in 2019, before the Covid-19 pandemic hit, to S$35.83 psf in 2024. In suburban areas, the prime monthly rent rose from S$31.76 psf in 2019 to S$32.90 psf in 2024. However, there is no publicly available breakdown of rent rates for commercial properties between malls managed by S-Reits and private landlords, such as shophouses and strata malls. Rents not 'main priority' for S-Reits Rents are 'not always the main priority' of S-Reits as they place greater importance on tenant curation, said Sulian Tan-Wijaya, the executive director of retail and lifestyle at real estate consultancy Savills Singapore. On the other hand, private landlords tend to vary rent depending on their own strategies and objectives, and are more flexible with concepts and operating hours, she added. The structural differences in lease tenure also play a role. Private landlords often offer short leases of up to two years, while malls under S-Reits tend to sign tenants on longer terms of at least three years, with renewal options. This locks in rent levels and contributes to rental stability at malls managed by S-Reits, said Carmen Lee, head of investment research at OCBC. Nevertheless, the changing habits of consumers, as well as the increasing cost of running a business, can contribute to the perception that rents are rising faster, said analysts. They pointed out that the cost of manpower and utilities have also increased alongside rent, even as Singaporean shoppers go overseas or online to stretch their dollar. 'When sales are down, every cost, including rent, would naturally be high by comparison,' said Tan-Wijaya. The chief executive officer of Lendlease Global Commercial Trust Management, Guy Cawthra, said all malls have a spread of rents across their property, depending on the unit size, location and amenity, such as F&B or healthcare. There will 'undoubtedly be competition for tenants for the best space' in the best malls, which 'naturally' drives up rents, he noted. The trust is the manager of Lendlease Global Commercial Reit, which counts 313@Somerset, Parkway Parade and Jem among its retail properties in Singapore. Managing considerations S-Reits agreed that it was in their favour to ensure that tenants remain supported with sustainable rents. A spokesperson from CapitaLand Integrated Commercial Trust (CICT) said that it aims to strike a balance between supporting its tenants' growth and keeping its malls relevant to the needs of shoppers, while delivering long-term sustainable returns to its unitholders. CICT's retail portfolio includes prime malls such as Ion and Raffles City Singapore, as well as suburban malls such as Tampines Mall and Bukit Panjang Plaza. CICT works with tenants on their leasing arrangements to support their business needs. This includes tracking tenants' occupancy cost, which is the total rent as a percentage of total tenant sales. Its occupancy cost has remained below 19 per cent over the past seven years, with tenant sales consistently outpacing rent increases. Similarly, Cawthra said that Lendlease is 'highly aligned' with its tenants. 'We want them to succeed, (and we want to) maintain high occupancy and continue to provide a vibrant retail offering for our shoppers.' To that end, Lendlease monitors its tenant sales performance and supports them when required, such as through marketing and promotions. A spokesperson for Frasers Centrepoint Trust (FCT), which manages 10 properties, mostly suburban malls, said that the trust 'constantly curates and refreshes (its) tenant mix' based on consumer trends, as well as concept relevance and long-term viability of the tenant's business. The manager of Suntec Reit has taken a similar approach, introducing youth and family-oriented concepts at Suntec City to transform the mall into an 'experience hub' rather than a 'shopping destination'.
Business Times
06-07-2025
- Business
- Business Times
S-Reits with best debt profiles have an average gearing ratio of 33.5%
[singapore] Last month, the US Federal Reserve opted to maintain its benchmark interest rate, adopting a cautious stance despite speculation about a potential rate cut as early as July, with chair Jerome Powell stating that future decisions will be data-dependent. 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 for the S-Reits & Property Trusts Chartbook.
Business Times
06-07-2025
- Business
- Business Times
S-Reits with lowest relative gearing have an average ratio of 33.5%
[singapore] Last month, the US Federal Reserve opted to maintain its benchmark interest rate, adopting a cautious stance despite speculation about a potential rate cut as early as July, with chair Jerome Powell stating that future decisions will be data-dependent. 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 for the S-Reits & Property Trusts Chartbook.
Business Times
06-07-2025
- Business
- Business Times
Top S-Reits with lowest gearing ratios average 33.5% as investors await rate cuts
[singapore] Last month, the US Federal Reserve opted to maintain its benchmark interest rate, adopting a cautious stance despite speculation about a potential rate cut as early as July, with chair Jerome Powell stating that future decisions will be data-dependent. 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 for the S-Reits & Property Trusts Chartbook.
