With rate cuts in sight, broadening sector performance, and compelling valuations, S-REITs appear to be set for a meaningful rebound at last. Here’s how you can ride this revived wave.
In our recent webinar on S-REITs, Syfe Managing Director & Head of Investment & Advisory, Ritesh Ganeriwal, and WealthEnjoy’s co-founder Richaard Chee shared their outlook on the S-REIT market, key trends, and revealed actionable strategies investors can use to position their portfolio for potential upside.
For a detailed breakdown of the S-REITs outlook, watch our webinar here.
Singapore REITs (S-REITs) have been through a turbulent few years. From the COVID-19 crash to the relentless climb in global interest rates, the asset class has struggled to regain its footing. Investors faced rising borrowing costs, pressured distribution payouts, and capital values stuck in a trading range. But as we move deeper into 2025, the tide appears to be turning.
Several factors suggest that S-REITs could be on the cusp of a meaningful rebound. Interest rate cuts are finally in sight, Singapore’s economy remains resilient, valuations look compelling, and sector performance is broadening. For investors seeking income and diversification, this may be a timely moment to revisit S-REITs.
Here are three indicators of a REIT revival.
1. The Rate Cut Effect: A Powerful Tailwind
The most critical change in the REIT outlook is the shift in global monetary policy. After two years of aggressive tightening, the US Federal Reserve has paused and is expected to resume cutting rates in September, with markets pricing in a full percentage point of reductions by 2026. Singapore’s own government bond yields have already started to decline as the Monetary Authority of Singapore (MAS) adopts a more accommodative stance.
Why does this matter for REITs? Because their performance is closely linked to interest rates. Falling yields lower borrowing costs for REITs, improve refinancing prospects, and reduce the attractiveness of cash-like alternatives such as T-bills. Historical data shows that real estate assets typically do well in the quarters following the end of a Fed hiking cycle. In other words, conditions are lining up in much the same way as they have in past rebounds.
For investors, this is the first meaningful break in the headwinds that have weighed on REITs since 2022. Lower rates not only support higher valuations but also signal renewed investor appetite for yield-bearing assets like REITs.
2. Singapore’s Strengths: A Domestic Advantage
Even as global markets waver, Singapore has stood out for its economic resilience. GDP growth has been robust at 4.3%, while inflation has remained subdued. Local equities have delivered strong returns—up 24% in 2024 and another 16% so far in 2025—driven by the strength of the banking sector.
Another important factor is currency. The Singapore dollar has appreciated against the U.S. dollar by more than 6% this year. For investors in Singapore, this means foreign returns are eroded unless they are significantly higher. At the same time, it reinforces the appeal of domestic investments like S-REITs, which are denominated in Singapore dollars and therefore not subject to currency drag.
This combination of strong growth, stable inflation, and a strengthening Singapore dollar gives S-REITs a uniquely favourable backdrop. While U.S. equities may struggle to clear a higher performance bar, Singapore’s domestic story continues to shine.
3. Compelling Valuations and Fundamentals
Valuations today make the REIT sector hard to ignore. S-REITs currently trade at a price-to-book ratio of less than 0.9—well below the long-term average of 1.0 and more than one standard deviation cheaper. Distribution yields are attractive at above 6%, offering investors roughly a 4% premium over Singapore government bonds.
Balance sheets remain in good shape. Average leverage levels across the sector are below 40%, comfortably within regulatory limits, and with both short- and long-term interest rates trending down, financing costs should ease further in the months ahead. Importantly, REITs are not overextended heading into this new cycle, leaving them well positioned to benefit from an upturn.
Sector-level performance also looks broad-based. Hospitality REITs are enjoying the tourism recovery, industrial and data centre REITs benefit from AI and cloud demand, while healthcare REITs add a defensive anchor. Even cyclical areas such as retail and office REITs are showing early signs of improvement. This breadth is encouraging, suggesting the recovery is not limited to one pocket of the market.
For investors, this means exposure to REITs offers both income security and potential capital appreciation at attractive entry points.
Why Diversification and Mega-Cap REITs Matter
Within the sector, size and diversification can make a difference. Larger, mega-cap REITs with access to cheaper capital and diversified portfolios are often the first to benefit in an upcycle. Their ability to stabilise or grow distribution per unit (DPU) gives investors confidence and often sets the tone for the broader market.
At the same time, diversification across REIT sub-sectors can help smooth out volatility. Hospitality and retail may deliver cyclical upside, while industrial, healthcare, and data centres provide more structural, stable growth. For investors, the most resilient approach is a balanced allocation across multiple segments rather than betting on a single sector.
How Syfe REIT+ Helps Investors Capture the Upside
For investors who see the potential in S-REITs but prefer a simpler way to invest, Syfe REIT+ offers a ready-made solution with:
- Diversified exposure: REIT+ provides access to Singapore’s largest and most liquid REITs across key sectors, tracking the iEdge S-REIT Leaders Index.
- Attractive yields: With distribution yields above 6%, investors can enjoy consistent income streams.
- Automatic rebalancing: The portfolio adjusts regularly to reflect market leaders, so investors remain aligned with the strongest players in the sector.
- Convenience and liquidity: Instead of managing multiple REIT holdings, investors can build a diversified REIT portfolio with just one click.
For long-term income investors, Syfe REIT+ offers an efficient way to participate in the potential REIT revival without the complexity of stock picking.
Conclusion: A Timely Opportunity
S-REITs have weathered a tough stretch, but the outlook is improving. With interest rates entering a cutting cycle, Singapore’s economy holding firm, valuations still cheap, and sector-level growth broadening, the conditions are aligning for a rebound.
Risks remain—sticky U.S. inflation or unexpected shocks could derail the rate-cut path. However, the macro and domestic tailwinds are stronger than they have been in years. For investors looking for income, diversification, and the potential for capital upside, this may be the moment to look into S-REITs. And with tools like Syfe REIT+, accessing this opportunity is easier and more cost-efficient than ever.
You must be logged in to post a comment.