S'pore retail investors to get expert tips on Reits as the asset class comes back into play
S'pore retail investors to get expert tips on Reits as the asset class comes back into play
SINGAPORE – Retail investors can get expert tips on real estate investment trusts as the market for Reits in Singapore heats up with falling interest rates and fresh listings on the horizon.
Research analysts, trading representatives and Reit managers will hold 10 sessions under a newly launched educational series on the asset class aimed at enabling retail investors to better understand and assess the risks involved before putting their money into Reits.
More than 300 investors, brokers and investment professionals will get to visit Reit properties and understand the assets that they invest in under the six-month programme, which is organised by the Securities Investors Association (Singapore), or Sias.
Mr David Gerald, president of Sias, said on May 24: 'Going beyond reading annual reports or attending webinars, investors will now walk through the actual assets, engage the managers, ask questions and understand the fundamentals as part of investor education. Investors will need to understand and assess the risks involved as well when investing in Reits.'
The programme is supported by SGX Group, Reit Association of Singapore and the Securities Association of Singapore.
Head of equities at SGX Group Ng Yao Loong said SGX sees a healthy Reit IPO pipeline, particularly in emerging sub-sectors like data centres, purpose-built living spaces and logistics assets.
Speaking at a Reits symposium on May 24, he noted that the Singapore bourse has emerged as the third-largest Reit listing venue globally by fund-raising, after China and India, in the last five years, adding that SGX is making efforts to ensure that Singapore remains the listing venue of choice for Reits globally.
Japan's Nippon Telegraph and Telephone in its earnings release in May said it plans to list its data centre Reit on the SGX in the future. Singapore's Centurion said in a January filing that it is exploring the establishment of a Reit involving some of its workers and student accommodation assets. If the plan materialises, the Reit will be listed on the mainboard of the SGX.
Mr Ng also introduced InvestSG, a platform where Reit investors can find sector insights, research, community discussions, market data and model portfolios on Reits, enabling smarter investment portfolio decisions. The platform is slated to be launched in the later part of 2025.
Reits are funds that invest in a portfolio of income-generating real estate assets such as shopping malls, offices and hotels. They often take on some debt to buy assets and are subject to an overcall cap on gearing in Singapore. Similar to stocks, Reits are listed on stock exchanges, allowing investors to buy and sell units.
With interest rates trending downwards, Reits are expected to benefit in 2025 as borrowing costs decline and investor appetite for income-generating assets grows.
RHB Bank analyst Vijay Natarajan in a May 20 report noted that most of the 15 Singapore Reits, or S-Reits, under the bank's coverage reported in-line results for the first quarter, driven by softer interest cost pressures.
He said the sharp fall in domestic rates is benefiting the S-Reits, with the majority of them reporting lower overall interest costs.
The fall in benchmark rates has also resulted in lower yields for alternative options such as deposit rates, T-bills and Singapore savings bonds, and rising yield spreads for S-Reits – potentially creating room for fund inflows to the sector if the tariff overhang is removed, he added.
Mr Ng said Reits stand out as an alternative asset class in times of market volatility, as they exhibit a lower correlation with macro uncertainties as compared to equities and other asset classes.
'As a sector, it is currently trading at a cyclically low valuation of 0.8 time P/B (price-to-book), or around a 20 per cent discount, while offering a forward dividend yield of around 6 per cent,' he said.
A P/B ratio of 0.8 time for Reits indicates that the market price of the Reit is 80 per cent of its book value, suggesting that the Reit is trading at a discount to its underlying asset value.
He added that Reits not only offer passive rental income, but also exposure to trends such as return-to-office mandates, the rise of artificial intelligence, and evolving consumption patterns.
Mr Natarajan of RHB Bank said the direct impact of US tariff policies have been minimal on S-Reits so far, and favours the industrial, office, healthcare, and suburban retail sectors. Hospitality remains his least preferred sector.
UOB Kay Hian analyst Jonathan Koh added that several S-Reits, including Frasers Centrepoint Trust, Keppel Reit and CapitaLand Integrated Commercial Trust, reported positive rental reversion, or a positive change in rental rates.
'Singapore is a safe haven due to fiscal discipline and its lowest reciprocal tariff of 10 per cent,' he said.
He noted that a favourable rate environment, with a 10-year government bond yield of 2.6 per cent and a three-month compounded Singapore Overnight Rate Average, or Sora, at 2.3 per cent, has helped to boost the attractiveness of Reits, which are now offering yields of 6-7 per cent.
Join ST's WhatsApp Channel and get the latest news and must-reads.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
2 hours ago
- CNA
CapitaLand Ascott, SATS take top spots in Singapore corporate governance index
Singapore-listed companies with large market caps, such as SATS and CapitaLand Ascott Trust, have clinched top spots on a key corporate governance scorecard. The Singapore Governance and Transparency Index looks at factors like the timeliness of financial reports and transparency of internal processes. SATS has retained its pole position in the general category. Meanwhile, CapitaLand-related entities swept all top three spots in the REIT and business trust category. They were among nearly 500 SGX-listed companies that were given scores by accounting body CPA Australia and the Singapore Institute of Directors.
Business Times
7 hours ago
- Business Times
Good governance for vibrant capital markets: towards a market-centric dynamic index
IN 2024, the Singapore Governance and Transparency Index (SGTI) was re-introduced as a dynamic index designed to reflect continuous changes in sustainable corporate governance regulations and practices. The index placed greater emphasis on ESG, increasing both the number of sustainability-related questions and its overall weighting. Building on this foundation, SGTI 2025 further expands this framework by incorporating additional sustainability disclosures, including climate reporting. SGTI 2025 had a mean score of 70.9 points out of a maximum achievable score of 143 points. The base score covers five dimensions: Board Responsibilities (35 points), Rights of Shareholders (10 points), ESG and Stakeholders (20 points), Accountability and Audit (10 points), and Disclosure and Transparency (25 points). The final score is derived from the base score and an adjustment for bonuses and penalties. (See also box titled 'How scoring for the Index is done'). Companies show the strongest performance in disclosures relating to shareholder rights (mean normalised score of 87 per cent), followed by sustainability-related matters and accountability and audit (both having a mean normalised score of 68 per cent). (See below.) Companies could further improve their sustainability reporting by advancing their sustainability targets beyond the short term. Targets are one of the primary components required of sustainability reports and, according to SGX Practice Note 7.6, should be considered for the short-, medium- and long-term. Progress needed on ESG targets and climate risks Over 80 per cent of companies disclose quantitative sustainability targets for the next year. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But only two-thirds of companies disclose such targets for the mid- to long-term. Short-term targets are important and necessary because they show that companies are taking specific, concrete actions towards sustainability. This enables them to make some immediate progress, which in turn can help to strengthen investor confidence. However, longer-term targets are equally important, allowing companies to address more complex sustainability issues. Such targets facilitate a more strategic approach to sustainability, integrating it with long-term business growth and risk-management strategies. This helps to demonstrate companies' ongoing commitment to sustainability and can help them to avoid accusations of greenwashing. (See below.) Another area in which companies could improve their sustainable corporate governance is in their climate reporting. Again, over 80 per cent of companies identify climate change as a material issue and disclose their processes for identifying and assessing climate-related risks. Fewer companies go further to report how they are managing their climate-related risks and opportunities. Transparency in climate reporting means not only identifying risks, but also explaining how those risks are being addressed, and how opportunities are being leveraged. Limited disclosures may hinder investors and other stakeholders from gaining the comprehensive understanding needed for assessing how effectively the company is addressing climate-related risks, opportunities and evolving standards. Value measures for market-centric assessment The national initiative to revitalise Singapore's equities market has gained significant attention. A recent review of it led to the announcement of several measures aimed at enhancing trading liquidity. Among these was the intention to move Singapore to a more disclosure-based regime. This requires key stakeholders to actively assume their roles and responsibilities. For issuers, this includes upholding and strengthening corporate governance, and giving renewed attention to shareholder value creation. The next phase of SGTI will take these two priorities as a starting point. On the one hand, assessment of corporate governance disclosures and practices will continue to be the mainstay of the index. On the other, we propose adding a new dimension, reflecting the fact that creating value for shareholders is a fundamental objective of corporate governance. Specifically, we propose including value-related indicators based on financial statements or stock-related data, either separately or in combination. Some of these could include return on equity, net profit margin, leverage, price-earnings ratio, price-to-book ratio or the enterprise multiple (enterprise value / earnings before interest, taxes, depreciation and amortisation). (See below.) Indicators based on specific aspects such as dividend yield could also be included. These value measures would account for 25 per cent of the total SGTI score, with disclosure-based assessment making up the remaining 75 per cent. Assessment for Reits and business trusts would follow a similar framework, although they would continue to have additional coverage of trust-specific items (structure, leverage, interested-person transactions, competency of Reit manager or trustee-manager, and emoluments). By incorporating company performance on market-related indicators, SGTI would have the potential to uncover value stocks that possess both good governance and market-related performance metrics. Since SGTI assesses all issuers, it could also support the broader efforts to place greater focus on small- and mid-cap companies. Beyond ESG to EESG This also allows for a wider consideration of sustainability, going beyond ESG to EESG, where the first 'E' refers to economics. Much of sustainability has focused on ESG factors. However, economics is also a key dimension, because corporate sustainability requires financial viability. Also, shareholders are a company's primary stakeholder group. A more market-oriented assessment would better assess the degree to which their interests are being upheld, not just by evaluating transparency and disclosures, but also by considering financial outcomes. Sustainable corporate governance is not only about what is disclosed; it is also about what is delivered. CGS invites comments on this proposal. Please send your suggestions to cgs@ Comments are requested by Sep 30, 2025. How scoring for the Index is done SGTI is a unified framework comprising two separate categories, namely the General Category and the Reit and Business Trust Category. These categories are distinct and are not to be compared directly with each other. For the General Category, the SGTI score has two components: the base score and the adjustment for bonuses and penalties. The base score for companies contains five sections ('BREAD'): Board responsibilities [35 points]; Rights of shareholders [10 points]; ESG and stakeholders [20 points]; Accountability and audit [10 points]; and Disclosure and transparency [25 points]. The aggregate of bonuses and penalties is incorporated into the base score to arrive at the company's SGTI total score. In the Reit and Business Trust Category, the companies are evaluated on a similar set of criteria, but with added coverage on the unique nature of their operations. The base score for Reits and business trusts includes items in the base score for the SGTI (converted to 75 points), as well as trust-specific items for Reits and business trusts (25 points). These cover five aspects ('SLICE'): Structure; Leverage; Interested-person transactions; Competency of the Reit manager/trustee-manager; and Emoluments. SGTI 2025 covers 467 Singapore-listed companies in the General Category and 42 Reits and business trusts which released their annual reports by May 31, 2025. The sources of information for SGTI assessment included annual reports, sustainability reports, Web sites and announcements on SGXNet. Announcements made on SGXNet and media coverage between Jan 1, 2023 and Apr 30, 2025 were used to update the scores. The SGTI assessment was conducted independently with an in-house research team at the Centre for Government and Sustainability (CGS) and guidance from an external advisory panel. Further information on the scoring methodology, including the full instrument, and past results may be obtained from CGS' website at Queries about the SGTI may be sent to cgs@ In order to maintain independence and fairness of the SGTI, reports or advice cannot be provided to individual companies. Expand Lawrence Loh, Nguyen Hanh Trang, Nguyen Thi Thuy and Annette Singh are respectively director, senior research analyst, senior research associate and principal research associate of the Centre for Governance and Sustainability at the NUS Business School.
Business Times
14 hours ago
- Business Times
United Hampshire US Reit H1 DPU rises 4% to US$0.0209 on higher occupancy levels
[SINGAPORE] United Hampshire US Real Estate Investment Trust (Reit) on Wednesday (Aug 13) posted a 4 per cent increase in its distribution per unit (DPU) for the first half-year ended June to US$0.0209, from US$0.0201 in the year-ago period. The distribution will be paid out on Sep 26, with its books closure date on Aug 22. The rise in DPU came on the back of higher occupancy levels, an improved tenant mix and lower financing costs. The Reit's committed occupancy levels for its grocery and necessity portfolio increased to 97.2 per cent, from 96.3 per cent on Jun 30, 2024. As for the self-storage segment, its occupancy level was up on average at 95.3 per cent, from 94.35 per cent. For H1 FY2025, United Hampshire US Reit secured five new leases and 10 lease renewals, totalling 82,395 square feet (sq ft). The manager noted that key leasing activities include the development of a new 5,000 sq ft store on existing excess land in St Lucie West, which has been pre-leased to health insurance company Florida Blue for a 10-year period. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The new store is adjacent to another recent development project, the Academy Sports + Outdoors store, which opened in November 2023. The completion and opening of the new Florida Blue store is expected to take place in 2026. Revenue for the period, however, declined 3 per cent to US$35.7 million from US$36.9 million in the corresponding period a year before. Net property income fell 5.6 per cent to US$24 million for H1 FY2025 from US$25.4 million in the same period a year prior. This was mainly due to the absence of contributions from three divested properties – the Freestanding Lowe's and Sam's Club properties within Hudson Valley Plaza and the Albany Supermarket, which were divested in August 2024 and January 2025, respectively, said the manager of the Reit. Distributable income increased by 2.4 per cent to US$13 million from US$12.7 million previously, largely on the back of reduced finance costs from lower interest rates and borrowings. This followed partial loan repayments made using proceeds from the aforementioned divestments. Aggregate leverage stood at 38.9 per cent, with an interest coverage ratio of 2.59 times as at Jun 30, 2025. Its weighted average lease expiry was at 7.6 years, with a tenant retention rate of 90 per cent. Moderate outlook amid tariff, labour market uncertainty The manager of the Reit noted that its retail sales for the period reached US$4.2 trillion, marking a 3.6 per cent year-on-year increase. This reflected continued consumer resilience amid US gross domestic product growing at a better-than-expected annualised rate of 3 per cent for the three months ended Jun 30. Additionally, inflation was relatively stable at 2.7 per cent in June. However, economic uncertainties remain over the potential impact of the latest tariff policies, while the US unemployment rate in July is low at 4.2 per cent – though a softening in the labour market could be on the horizon. The manager aims to remain 'nimble and proactive' while continuing to strengthen United Hampshire US Reit's income streams and balance sheet through asset enhancement and development initiatives, accretive acquisitions, and divestments. This comes as foot traffic for the strip centre sector has stayed resilient in the year to date, supported by strong demand for top-tier spaces. On Aug 1, the Reit completed the acquisition of a grocery-anchored freehold property, Dover Marketplace, for US$16.4 million . The price represented a discount of about 4.8 per cent to the independent valuation of US$17.2 million as at Jun 30. The retail neighbourhood shopping centre is anchored by supermarket operator Giant, with other notable tenants including M&T Bank and sandwich fast-food chain Subway. It marks the Reit's third acquisition in Pennsylvania, and extends its footprint in the affluent and densely populated US North-east markets. The manager noted, however, that supply growth is expected to remain muted over the next five years, amid an evolving macroeconomic backdrop. Units of the Reit closed up 2.1 per cent or US$0.01 at US$0.48 on Tuesday.
