With seven trading days remaining in 2025, the Straits Times Index (STI) has delivered a year-to-date price return of 20.7% as at Dec 18, while Singapore REITs (S-REITs) have gained 9.0%. Including dividends, total returns for the STI and S-REITs reached 26.7% and 14.4% respectively – placing S-REITs on track for their strongest annual performance since 2019 as previously highlighted in this column.
Half of this performance was achieved in Q3, driven by improved operating fundamentals across S-REIT sub-segments and a more conducive environment due to lower interest rates. The US Federal Reserve implemented three 25 basis-point rate cuts this year, with market analysts expecting two more reductions in 2026.
In comparison, S-REITs have outperformed the FTSE EPRA Nareit Asia ex Japan Index’s 13.7% total returns, while US REITs experienced a decline of 3.1%.
Within S-REITs, Diversified REITs led with 10.8% total returns, followed by Industrial REITs at 8.0%, and Healthcare REITs at 6.6%.
Investor flows reflected continued strong retail participation, with retail net inflows of S$961 million, contrasting with institutional net outflows of S$1.3 billion. Retail investors have remained consistent net buyers since 2019.
The 10 S-REITs which attracted the largest net retail inflows in this year to date were $Mapletree Ind Tr(ME8U.SI)$ $Mapletree Log Tr(M44U.SI)$ $NTT DC REIT USD(NTDU.SI)$ $CapLand Ascendas REIT(A17U.SI)$ $CapLand Ascott T(HMN.SI)$ $Keppel DC Reit(AJBU.SI)$ $ParkwayLife Reit(C2PU.SI)$ $Frasers Cpt Tr(J69U.SI)$ $Frasers L&C Tr(BUOU.SI)$ $DigiCore Reit USD(DCRU.SI)$.
Together, the 10 S-REITs accounted for over S$1 billion in combined inflows. Most of these names are concentrated in industrial and data centre segments. Industrial REITs delivered resilient performance in Q3, supported by stable occupancy, positive rental reversions, improved margins, and year-on-year growth in distributions per unit. Meanwhile, data centres remain a focal point for investors, given their positioning as key beneficiaries of accelerating demand driven by artificial intelligence (AI).
From a valuation standpoint, the iEdge S-REIT Index trades at a price-to-book ratio of 0.95, below its historical average of 1.0 to 1.1, with an average distribution yield of 5%.
In the ETF segment, the Lion-Phillip S-REIT ETF saw over S$40 million in net inflows in October, ranking it among the top three ETFs by net inflows for the month. This underscores robust investor demand within the sector.
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