— A conversation with REIT expert Kenny Low ( Michelle Martin ,MoneyFM89.3)
Executive Summary
With bank valuations near historical highs and the U.S. 10-year yield still above 4.2%, Singapore REITs (S-REITs) are flashing a “technical breakout + dividend yield premium” signal.
The sector, however, still needs two catalysts: (1) institutional money flowing back and (2) clear Distribution Per Unit (DPU) recovery.
Kenny Loh’s advice:
Do not “sell all banks and go all-in REITs”; rebalance gradually.
Focus on individual names with visible DPU inflection points or repaired balance sheets.
1. Macro & Index: S-REITs Just Exited a Two-Year Downtrend
Index performance: After “down-sideways-up” from 2H 2024 to 1H 2025, the FTSE ST REIT Index hit a fresh high of 689 in August.
12-month total return: 10.5%
1H 2025 total return: 4.2%
Chart: Monthly inverted head-and-shoulders neckline at 660 has been broken on rising volume—textbook early-bull confirmation.
Breakout Price target 730 points in 12 months, implying ~10% upside plus 5–6% forward dividend yield = 15–16% total return.
2. Sector & Names: Who Is Leading, Who Is Lagging?(1-month price performance)
Leaders：
$ESR REIT(9A4U.SI)$ +11.6% – Industrial/logistics; improving occupancy in China & Australia.
$Suntec Reit(T82U.SI)$ +10.7% – Office assets in SG/Shanghai; positive rental reversions.
$CapLand IntCom T(C38U.SI)$ +9.5% – Singapore business-park DPU q-o-q +2.3%.
Elite UK Commercial Trust +7.9% – London office cap-rate compression, NAV discount narrowing.
$ManulifeReit USD(BTOU.SI)$ +4.5% – U.S. Grade-A office vacancy still elevated.
Laggards：
$KepPacOakReitUSD(CMOU.SI)$ US REIT – 7.0%
$DigiCore Reit USD(DCRU.SI)$ –4.5% Data-center
3.Banks vs REITs: Four-Dimension Comparison
Metric | 3 Local Banks (DBS/OCBC/UOB) | S-REITs (Average) | Kenny’s Take |
Valuation | P/B 1.25–2.14, near peaks | P/B 0.8–1.0, 5–15% discount | REITs cheap, banks expensive |
Dividend Yield | 4.4–5.0% | 5.5–7.0% (mid/small >9%) | REIT yield pick-up 150–200 bps |
Earnings Driver | NIM peaking, WM fees offset | Lagged rate-cut beneficiary | Banks steady; REITs more elastic |
Ownership Mix | Institutions (core) | Retail-heavy, institutions light | Inflows need U.S. 10-yr <3.8% | |
4.Three Lead Indicators That Decide Further Upside
U.S. 10-year yield: A sustained break below 3.8% could trigger institutional re-allocation.
Singapore 10-year government bond yield: Already down from 3.7% to 3.0% YTD, enhancing REITs’ relative value.
DPU growth:
Inflection seen: $Capitaland Commercial TR(CPITF)$ CapitaLand Integrated Commercial Trust (+3.5% y-o-y).
Still sliding: $Mapletree Logistics Trust Units Real Estate Investment Trust(MAPGF)$ (two-year downtrend—watch for 2H 2025 stabilization).
5. Investor Action Checklist
Positioning
If bank weight >40% of portfolio, consider “trim 10% for every 5% up, rotate into REITs” ladder rebalancing.
Cap any single REIT at 5% of portfolio to avoid tail-risk.
6.Stock-picking Framework (Kenny’s 3-Step Screen)
Debt tenor >4 yrs & ≥70% fixed-rate—limits refinancing shock.
2025–2026 DPU CAGR ≥3%.
Price above 200-DMA with expanding volume.
7. Risk Flags
Industrial/Logistics: Watch U.S.-China tariff news & e-commerce inventory cycle.
Data-centers: Monitor AI/Starlink demand vs. 2025–2027 supply pipeline.
U.S. Offices: Wait for >30% NAV discount + occupancy bottom before bottom-fishing.
8.One-Sentence Takeaway
“The REIT spring may have begun, but the train has just left the station—board calmly and keep your seat-belt fastened.”— Kenny Loh
(Real-time charts and monthly updates are published on Kenny’s website, “REITSavvy”.)
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