{"id":22981,"date":"2025-03-20T14:17:51","date_gmt":"2025-03-20T06:17:51","guid":{"rendered":"https:\/\/www.syfe.com\/magazine\/?p=22981"},"modified":"2025-05-16T14:27:59","modified_gmt":"2025-05-16T06:27:59","slug":"reit-positioned-for-a-turnaround","status":"publish","type":"post","link":"https:\/\/www.syfe.com\/magazine\/reit-positioned-for-a-turnaround\/","title":{"rendered":"S-REITs: Ready for a Comeback? See How Syfe REIT+ is Positioned"},"content":{"rendered":"\n
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S-REITs Market Finds Support Amid Stabilising Rates <\/strong><\/h2>\n\n\n\n

The S-REITs sector seems to have found its bottom. After a sluggish start to the year, S-REITs made a strong comeback in March<\/strong>, with the iEdge S-REIT Leaders Index delivering a +4.80% month-to-date (MTD) return.<\/p>\n\n\n\n

A key driver behind this rebound is the stabilising interest rate environment<\/strong>. Softer inflation and slower growth expectations have kept a lid on US Treasury yields, with the 10-year yield easing from 4.8% in mid-February to 4.3% in mid-March<\/strong>. This has also led to lower Singapore rates, providing support for S-REITs.<\/p>\n\n\n\n

Adding to the momentum, the Monetary Authority of Singapore\u2019s (MAS) S$5 billion programme <\/strong>to boost local shares has acted as a catalyst. Government initiatives have particularly benefited Singapore\u2019s blue-chip stocks, and S-REITs have been among the key winners.<\/p>\n\n\n\n

Your Syfe REIT+ Portfolios Continue to Outperform<\/strong><\/h2>\n\n\n\n

The REIT+ (100% REITs) portfolio has delivered a YTD return of +2.54%<\/strong> (as of March 18, 2025), continuing to outperform its benchmark, the iEdge S-REIT Leaders Index, which posted a +2.48% YTD return.<\/p>\n\n\n\n

Since its launch in April 2020, the portfolio has delivered an excess return of +5.06%<\/strong> compared to the benchmark (as of March 18, 2025). This steady outperformance is a result of our ongoing optimisation process, which prioritises a selection of top 20 S-REITs that are SGD-denominated, highly liquid, and managed by reputable managers.<\/p>\n\n\n\n

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A Turnaround in Sight <\/strong><\/h2>\n\n\n\n

We believe 2025 could be the year S-REITs stage a turnaround.<\/p>\n\n\n\n

The key factor is the significant improvement in the interest rate environment <\/strong>compared to the past two years. Local market rates, such as 3-month SORA, have declined notably over the last 12 months, dropping from 3.7% to 2.6%. With the Fed expected to cut benchmark rates two to three times this year, rates are likely to continue trending lower<\/strong>.<\/p>\n\n\n\n

Lower interest rates can lead to reduced refinancing costs for S-REITs<\/strong>, which are to positively impact S-REITs\u2019 financial performances in the coming quarters. Additionally, government initiatives to strengthen Singapore\u2019s equity market may attract more long-term institutional investors to the sector<\/strong>.<\/p>\n\n\n\n

Currently, the REIT+ (100% REITs) portfolio offers an estimated dividend yield of around 6.5% p.a<\/strong>., well above other yield-generating instruments, such as 10-year Singapore government bonds, which has a yield of 2.7%. Given these conditions, we believe now is an opportune time to accumulate S-REITs.<\/p>\n\n\n\n

Main Changes from the Index Rebalancing <\/strong><\/h2>\n\n\n\n

During this semi-annual rebalancing exercise, there is no new inclusion\/exclusion<\/strong> from iEdge S-REIT Leaders index. Due to our selection criteria of SGD-denominated REITs only, the iEdge S-REIT Leaders Index includes the USD-denominated Digital Core REIT (DCREIT), while the REIT+ portfolios exclude it.<\/p>\n\n\n\n

Please find below the updated list of constituents and their respective allocations after the rebalancing and Syfe’s optimisation process.<\/p>\n\n\n\n

Updated List of Constituents <\/strong><\/h2>\n\n\n\n
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Note: The data is accurate as of 28 February 2025. Due to market conditions, actual portfolio weightings may slightly deviate from those listed.<\/em><\/p>\n\n\n\n

Syfe REIT+ Strategy<\/strong><\/h2>\n\n\n\n

Launched in partnership with the SGX, REIT+ is an optimised portfolio of the 20 most well-known Singapore REITs. Instead of fully replicating the iEdge S-REIT Leaders index, we use an optimisation process to construct an index-tracking portfolio. <\/p>\n\n\n\n

Our selection focuses on REITs that are SGD-denominated, liquid, and backed by a decent market capitalisation and reputable management teams. The optimisation process, especially the exclusion of USD-denominated REITs such as Manulife US REIT (Ticker: MUST SP), has contributed to the outperformance of REIT+ portfolios. <\/p>\n\n\n\n

Additionally, our investment team manages corporate actions like rights issues and acts in your best interest. Dividends are also automatically reinvested to enhance your returns.<\/p>\n\n\n\n

Read More<\/strong>: <\/p>\n\n\n\n