Singapore REITs Monthly: Negatives Largely Priced In with Selective Overweight Stance May 19, 2026

Market Performance and Sector Overview

Singapore REITs (S-REITs) faced continued headwinds in March 2026, with the S-REITs Index declining 6.9% following a 1.9% drop in February. Despite the broader market weakness, Suntec REIT emerged as the sole positive performer, gaining 2.8% after completing the acquisition of its REIT manager by Acrophyte Asset Management. At the other end of the spectrum, KORE US REIT suffered the steepest decline of 17.7% as it resumed dividends in the second half of 2025 with approximately 10% payout.

Sector performance varied significantly, with healthcare REITs demonstrating relative resilience by declining only 0.7%, whilst overseas commercial properties bore the brunt of selling pressure, falling 12.9%. The S-REITs Index now trades at a forward dividend yield spread of approximately 3.8% and a price-to-net asset value of 0.9x, representing -1.1 standard deviations below the mean.

Valuation Assessment and Market Outlook

Current valuations appear to have largely incorporated downside risks stemming from Middle East conflicts, which have contributed to more hawkish interest rate expectations. However, the impact of higher utility costs has been broadly contained, as most expenses are either hedged or passed through to tenants, providing some operational stability.

Phillip Securities Research maintains an OVERWEIGHT recommendation on S-REITs whilst adopting a more selective approach. The firm expects approximately 3% distribution per unit growth on average for covered S-REITs in FY26e, supported by higher rents from contractual escalations and positive rental reversions, alongside lower financing costs. This outlook is underpinned by continued SORA rate declines, with 3-month SORA at approximately 1.05%, representing a 150 basis points year-on-year decrease.

Investment Strategy and Top Picks

The research house favours REITs with strong balance sheets, earnings resilience, and potential for distribution growth. Within sub-sectors, retail properties are preferred, where rental reversions are expected to remain robust in the high single-digits during 2026. Top picks include high-yielding S-REITs above 8.5% with resilient portfolios: Stoneweg Europe Stapled Trust (BUY, target price €1.89), Elite UK REIT (BUY, target price £0.41), and United Hampshire US REIT (BUY, target price US$0.69). Prime US REIT (BUY, target price US$0.32) is also favoured for its attractive valuation at 0.34x price-to-net asset value and cash flow visibility.

Frequently Asked Questions

Q: How did Singapore REITs perform in March 2026?

A: The S-REITs Index fell 6.9% in March 2026, extending the 1.9% decline from February. Only Suntec REIT posted gains of 2.8%, whilst KORE US REIT was the worst performer, declining 17.7%.

Q: What is Phillip Securities Research's recommendation on Singapore REITs?

A: Phillip Securities Research maintains an OVERWEIGHT recommendation on S-REITs but adopts a more selective approach, favouring names with strong balance sheets, earnings resilience, and potential for distribution growth.

Q: What are the current valuation levels for Singapore REITs?

A: The S-REITs Index trades at a forward dividend yield spread of approximately 3.8% and a price-to-net asset value of 0.9x, which is -1.1 standard deviations below the mean.

Q: What growth expectations does the research house have for FY26e?

A: Phillip Securities Research expects approximately 3% distribution per unit growth on average for covered S-REITs in FY26e, supported by higher rents and lower financing costs from declining SORA rates.

Q: Which sub-sector does the research house prefer and why?

A: The firm prefers retail properties, where rental reversions are expected to remain robust in the high single-digits during 2026.

Q: What are the top stock picks mentioned in the report?

A: Top picks include Stoneweg Europe Stapled Trust (BUY, €1.89), Elite UK REIT (BUY, £0.41), United Hampshire US REIT (BUY, US$0.69), and Prime US REIT (BUY, US$0.32).

Q: How have equity fund raises for acquisitions performed historically?

A: Data from 2025-2026 shows mixed market reactions to equity fund raises, with performance highly dependent on the accretive nature of deals. The market demonstrated clear discipline regarding deal quality, with dilutive transactions suffering sharper sell-offs.

Q: What factors support the current investment thesis?

A: S-REITs' share prices are supported by global fund flows into stable, defensive strategies, with the sector viewed as a safe-haven amid market volatility and heightened geopolitical tensions.

This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.

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About the author

Darren Chan

Darren has over seven years of experience across both the buy-side and sell-side. During his tenure as a fund manager, he managed multiple funds and mandates, including dividend income, growth, customised, Singapore-focused, and regionally focused strategies. He holds a First-Class Honours degree in Banking and Finance from the University of London.

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