Singapore REITs Monthly – Negatives largely priced in

24 Apr 2026
  • The S-REITs Index fell 6.9% in March 2026, extending the 1.9% decline in February 2026. Suntec REIT (SUN SP, ACCUMULATE, TP S$1.63) was the only REIT in the green for the month, rising 2.8% following the completion of the acquisition of its REIT manager by Acrophyte Asset Management. KORE US REIT (KORE SP, non-rated) was the worst performer, falling 17.7% as it resumed dividends in 2H25 with a c.10% payout. Healthcare was the best-performing sub-sector for the month, declining 0.7%, while overseas commercial was the weakest, falling 12.9%.
  • The S-REITs Index is now trading at a forward dividend yield spread of c.3.8% (mean) and a P/NAV of 0.9x (-1.1x s.d.). At these levels, valuations appear to have largely factored in downside risks stemming from the Middle East conflict, which has driven more hawkish interest rate expectations. Meanwhile, the impact of higher utility costs has been broadly contained, as most costs are either hedged or passed through to tenants.
  • We reiterate our OVERWEIGHT recommendation on S-REITs, but are more selective. We favour names with strong balance sheets, earnings resilience, and potential for DPU growth. We think 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. Within sub-sectors, we prefer retail, where rental reversions are expected to remain robust in the high single-digits in 2026. Our top picks are high-yielding S-REITs (above 8.5%) with resilient portfolios, such as Stoneweg Europe Stapled Trust (SERT SP, BUY, TP €1.89), Elite UK REIT (ELITE SP, BUY, TP: £0.41), and United Hampshire US REIT (UHU SP, BUY, TP US$0.69). We also like Prime US REIT (PRIME SP, BUY, TP US$0.32), for its attractive valuation (0.34x P/NAV) and cash flow visibility.

 

Sector round-up
We expect c.3% DPU growth on average for S-REITs under our coverage in FY26e, supported
by higher rents from contractual escalations and positive rental reversions, alongside lower
financing costs. This is underpinned by the continued decline in SORA rates, with 3M SORA at
c.1.05% (c.150bps lower YoY), which should drive refinancing at tighter spreads. As a result,
we expect more meaningful interest cost savings to materialise in FY26e, particularly for S
REITs with SGD-denominated debt due for refinancing.

Share price performance post equity fund raise
Looking at equity fund raises to finance acquisitions since 2025 (Figure 1), the share price
declined one day after the announcement in five of ten cases, typically adjusting toward the
discounted issue price, even when the acquisition was DPU-accretive. In the remaining cases,
the share price reacted positively, likely reflecting investors’ recognition of the acquisition’s
accretive nature. One month post-announcement, by which time new units would have been
issued and commenced trading on the SGX in most cases, the share price was higher in five
out of eight instances, as investors digested the earnings accretion. Three months after the
announcement, and in some cases following completion of the acquisition, the share price was
higher in three out of seven instances. The only dilutive transaction in Figure 1 was KREIT’s
acquisition of a one-third interest in MBFC Tower 3, which saw its share price fall 6.7% the day
after the announcement. In the case of preferential offerings, unitholders may be required to
commit additional capital to avoid dilution.

In summary, the data from 2025–2026 suggests that the market’s reaction to equity fund
raises for acquisitions is mixed and highly dependent on the accretive nature of the deal. The
market showed clear discipline regarding deal quality, with the only dilutive transaction
(KREIT’s acquisition of a one-third stake in MBFC Tower 3) suffering the sharpest immediate
sell-off of 6.7%.

About the author

Darren Chan
Research Analyst
PSR

Darren has over three years of experience on the buy-side as a fund manager. During his time as fund manager, he has managed multiple funds and mandates including dividend income, growth, customised, Singapore focused and regionally focused funds. He graduated from the University of London with a First-Class Honours degree in Banking and Finance.

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