Latest news with #S-Reits
Business Times
5 days ago
- Business
- Business Times
DBS, UOB, OCBC return surplus capital with over S$700 million of buybacks
[SINGAPORE] In the first five months of 2025, 63 primary-listed Singapore companies conducted share buybacks through open market acquisitions, spending a total of S$930 million – an 84% jump from S$505 million in the same period last year. This was the highest buyback level for the first five months of a year since 2020, based on an SGX (Singapore Exchange) market report on Monday (Jun 2). The local bourse said this was largely due to market volatility in April, which saw S$425 million of primary-listed shares purchased by issuers. 'The month of April 2025 produced the fourth highest monthly tally in buyback consideration for the past 10 years,' they added. The surge in buybacks does not include activity from secondary-listed companies or Singapore-listed Real Estate Investment Trusts (S-Reits). May alone accounted for S$176 million in share buybacks from primary-listed companies. UOB led the charge with S$144 million worth of shares at an average price of S$35.33. This brought UOB's total buybacks to S$253 million for the year so far. 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 DBS followed with S$18 million in buybacks at an average price of S$44.07, while Olam Group repurchased S$6 million worth of shares at an average price of S$0.93. For the first five months of 2025, the trio of local banks accounted for 77 per cent of the total S$930 million in filed buybacks. In the first five months of 2025, DBS led the local banking trio in share buybacks, repurchasing S$277 million worth of shares at an average price of S$42.13. UOB followed closely with S$253 million in buybacks at an average price of S$34.84 per share, while OCBC repurchased S$182 million worth of shares at an average price of S$16.69. 'The trio are actively returning surplus capital through share buybacks over the next two to three years,' the report noted. Beyond the primary list, secondary-listed Hongkong Land has also been actively buying back its shares, spending US$55 million at an average price of US$5.05 under a US$200 million programme announced on April 24. The deals, funded by recent transactions and capital recycling, are part of the company's strategy to cancel repurchased shares by Dec 31, 2025. This aligns with Hongkong Land's broader shift, launched in 2024, to focus capital away from build-to-sell projects and towards developing ultra-premium commercial properties in key Asian cities for long-term growth. Meanwhile, managers of ESR Reit and Stoneweg European Reit have also continued to buy back units as part of their capital management strategies. ESR Reit repurchased 838,700 units in May at an average price of S$2.21, following the buyback of 50.3 million units in the first four months of 2025 ahead of its 1-for-10 reverse stock split. The Reit manager views buybacks as a flexible, cost-effective tool to boost return on equity (ROE) and net asset value (NAV), while also helping to reduce market volatility and support investor confidence, SGX said. Stoneweg European Reit acquired 37,000 units at 1.47 euros each on May 15, following earlier buybacks in March and April. In FY2024, the Reit repurchased 1.5 million units as part of its capital management strategy to enhance ROE and NAV.
Business Times
6 days ago
- Business
- Business Times
S-Reits with Singapore office assets post resilient Q1 2025 amid positive rent reversions and high occupancy
[SINGAPORE] Singapore-listed office real estate investment trusts (S-Reits) reported a broadly resilient performance in the first quarter of 2025, underpinned by positive rental reversions, stable occupancy, and continued demand for prime office space despite macroeconomic uncertainties. The six S-Reits with Singapore office exposure – CapitaLand Integrated Commercial Trust (CICT), Mapletree Pan Asia Commercial Trust (Mpact), Suntec Reit , Keppel Reit , OUE Reit , and Lendlease Global Commercial Reit (LReit) — recorded positive rental reversions for their local office assets, with some achieving double-digit growth. Keppel Reit, a pure-play office S-Reit with mostly Singapore assets, reported positive rental reversion of 10.6 per cent across its portfolio, supported by new leasing demand and expansions from financial and technology tenants. Attributable net property income from its Singapore portfolio rose 3.3 per cent on year to S$66.4 million in Q1 2025. LReit also reported a 13 per cent rental uplift for its Jem office lease, while Suntec Reit reported a positive rental reversion of 8 per cent for its Singapore office portfolio in Q1 2025, its 27th quarter of positive rent reversion. CICT and OUE Reit posted rental reversions of 5.4 per cent and 9.9 per cent, respectively, for their office portfolios, while Mpact achieved 2.2 per cent at Mapletree Business City (MBC) and 7.4 per cent at its other Singapore office assets. Occupancy across S-Reits Singapore office portfolios remained healthy. 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 Suntec Reit's office portfolio maintained high committed occupancy of 98.7 per cent, while Keppel Reit, OUE Reit and CICT similarly reported committed occupancies ranging between 96.3 and 97.9 per cent for their Singapore office assets. Mpact's Singapore assets had occupancy ranging from 91.2 per cent at MBC to 99.5 per cent elsewhere, while LReit's Jem office building was fully occupied. Leasing activity was driven by tenants in the financial services, technology and professional services sectors. Looking ahead, Reit managers observed that tenants are likely to be more cautious in terms of demand for office space given potential headwinds from geopolitical tensions, slower global growth, and cautious business sentiment. However, limited supply of new office space expected in Singapore's core CBD area from 2025 to 2027 is expected to support rental stability. Managers also noted that the flight-to-quality trend remains prominent in Singapore's office sector, with newer office developments in prime locations better positioned to weather the uncertainty. The six S-Reits trade at an average price-to-book ratio of around 0.64, slightly below the sector average of 0.73, according to Bloomberg data. Reit managers expect performance of their Singapore office assets to remain stable. Suntec Reit noted that rent reversion for its Singapore office assets is expected to be modest, in the range of positive 1 to 5 per cent. Property consultancy JLL said in its Q1 office market report that Singapore's office rents registered a fourth consecutive quarter of marginal growth of less than 1 per cent quarter on quarter. It noted that office demand should stay positive, driven by supportive government policies and businesses seeking to capitalise on South-east Asia's growing need for wealth management, fintech and artificial intelligence solutions. JLL added that the positive demand coupled with limited new supply are expected to keep office rents and capital values on a stable to modest growth path over the next 12 months, barring any unforeseen economic shocks. The writer is a research analyst at SGX. For more research and information on Singapore's Reit sector, visit for the S-Reits & Property Trusts Chartbook.
Business Times
25-05-2025
- Business
- Business Times
Interest costs fall for S-Reits in Q1, but US tariffs cloud outlook
[SINGAPORE] Interest costs eased for more Singapore-listed real estate investment trusts (S-Reits) in the first quarter of FY2025, even as looming US tariffs cast a shadow over their prospects for the second half of the year. Nearly three-quarters of S-Reits saw flat to moderate interest cost declines in Q1 compared to a year ago, said Vijay Natarajan, an analyst with RHB Bank, following the release of S-Reits' Q1 results and business updates. Singapore-focused S-Reits had the largest drop in interest costs, with Far East Hospitality Trust (FEHT) , OUE Reit and Sasseur Reit among those that had the largest quarter-on-quarter declines. While most S-Reits have been unaffected by the global tariffs imposed by the US administration so far, there are indications that they could have an indirect impact on S-Reits in the second half of this year, said analysts. 'Tenants are cautious to sign long leases, and investment and divestment activity have slowed as buyers and sellers are revisiting underwriting assumptions,' said Krishna Guha, analyst at Maybank Securities. Q1 performance Most Reits and property trusts did not disclose distribution details in their quarterly updates. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Nevertheless, of the 13 trusts that provided distribution per unit (DPU) figures for Q1 in their latest results or business updates, six reported year-on-year declines, data compiled by The Business Times showed. There was an almost even split across the 27 S-Reits that reported revenue growth, with 14 of them posting higher growth. Across the 31 trusts that reported their net property income (NPI), 17 registered a decline. Analysts said that the latest results reported by S-Reits were broadly in line with their expectations. The majority of S-Reits under RHB's coverage reported in-line results with operational numbers remaining 'strong', said Natarajan. 'More than half of the S-Reits that reported financials... saw positive quarter-on-quarter and year-on-year net property income growth, supported by stable occupancy and positive rent reversions,' he said. Likewise, OCBC's research team said in a note on May 15 that the overall DPU for the 10 counters under its coverage fell 2.8 per cent year-on-year. In terms of valuation, the current price-to-book ratio is still 'undemanding' at 0.82 times as it is still below the eight-year average of 0.98 times. Hospitality sector hit Analysts said the hospitality sub-sector was among the worst performers in Q1, as revenue per available room (RevPar) declined year on year due to fewer major concerts. 'This hurt hospitality S-Reits with significant geographical concentration locally,' noted OCBC. FEHT's RevPar fell 6 per cent, while CDL Hospitality Trust saw a 15.8 per cent drop compared to a year ago. On the other hand, the retail sub-sector turned in a 'resilient' performance. Darren Chan, a senior research analyst at Phillip Securities Research, said that S-Reits with suburban retail assets, which saw rental reversions in the high single digits, were supported by consumers' focus on essential spending. However, retail assets more exposed to the hospitality sector, such as those in Starhill Global Reit and Suntec Reit's portfolios, had lower shopper traffic and tenant sales year on year. This was due to the absence of high-profile events and more cautious consumer sentiment ahead of potential US tariffs. Going forward Given the uncertainties posed by the US tariffs, Maybank's Guha expects the operating trend for Q2 to be similar to Q1. Sharing his view, OCBC said that in view of uncertainty over tariffs, it is important for investors to take into consideration the quality of the asset portfolio, geographical location of assets, track record and balance sheet strength of S-Reits. However, analysts remained optimistic of the longer-term performance of S-Reits in view of falling interest rates. Chan expects S-Reits to register a year-on-year growth in their DPU in FY2026. Similarly, OCBC forecasts a recovery in DPU by 4.4 per cent on average in FY2027, assuming there is no global recession. Among S-Reits, Natarajan thinks large-cap, high-quality Singapore-centric Reits could do well. He favours industrial, office, healthcare and suburban retail sub-sectors, while hospitality is the least preferred. OCBC prefers S-Reits that can exhibit DPU growth and are backed by strong sponsors. Its top picks are CapitaLand Ascendas Reit , CapitaLand Integrated Commercial Trust , Keppel DC Reit and Parkway Life Reit .
Business Times
20-05-2025
- Business
- Business Times
RHB names its S-Reit top picks on softer interest cost pressures, minimal tariff impact
[SINGAPORE] RHB analysts maintained their 'overweight' call on Singapore-listed real estate investment trusts (S-Reits) amid 'softer interest cost pressures' – particularly for Singapore-centric Reits. This comes as most S-Reits under RHB's coverage report lower overall interest costs, as 'sharp falls' in domestic rates have benefited interest costs, said RHB analyst Vijay Natarajan in a Tuesday (May 20) research note. 'The majority (of S-Reits are) reporting lower overall interest costs. The fall in benchmark rates has also resulted in lower yields for alternative options (ie Treasury 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 said. 'With benign sector valuations, we still see medium-term risk-rewards in favour of S-Reits,' he noted. Top picks include CapitaLand Integrated Commercial Trust (CICT) , CapitaLand Ascendas Reit (Clar) , Frasers Centrepoint Trust (FCT) , Keppel Reit , and Aims Apac Reit – all of which were assigned a 'buy' call. Cautiously positive guidance, strong operating numbers The majority of S-Reits under RHB's coverage reported in-line results with operational numbers remaining 'strong', Natarajan said. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'More than half of the S-Reits that reported financials... saw positive quarter-on-quarter and year-on-year net property income growth, supported by stable occupancy and positive rent reversions,' he said. A key positive was 'softer interest cost pressures', particularly for S-Reits focused on Singapore. There were no major changes to operational performance guidance, which is 'cautiously positive', as the direct impact of US tariff policies has been 'minimal' so far, while risks of uncertainties stemming from them remain clouded. Hence, a majority of the S-Reits under coverage foresee stable occupancy rates and positive rent reversions, barring certain overseas markets and segments. Singapore-centric Reits favoured to 'outperform' Among S-Reits, Natarajan thinks large-cap, high-quality Singapore-centric Reits could do well. In particular, he favours industrial, office, healthcare and suburban retail sub-sectors, while that of hospitality is the least preferred. 'Amidst a currently volatile macroeconomic backdrop, we expect Singapore-centric Reits to continue to relatively outperform and see larger fund inflows.' This comes as stable and supportive government policies post-election could create room for fiscal policy support in the event of an economic downturn, which is a positive for the real estate sector, Natarajan said. Noting that the three-month key benchmark Singapore overnight rate average has declined 70 basis points year to date, he adds that falling domestic interest rates are lowering Singapore-dollar denominated borrowing costs. 'Nearly three quarters of S-Reits saw flat to moderate interest cost declines quarter on quarter, with the largest declines seen among Singapore-centric S-Reits,' he said. 'In addition, most of the S-Reits also noted slight reductions in bank loan margins amid a flush of liquidity in the banking system.' Reits that logged the highest quarter-on-quarter interest cost declines include Far East Hospitality Trust (60 basis points), OUE Reit (50 basis points), Sasseur Reit (30 basis points), First Reit (30 basis points) and Acrophyte Hospitality Trust (30 basis points). Moreover, the stability of the Singapore dollar – benefiting from 'capital flight-to-safety' – and the Republic's growing financial hub status, could further benefit Singapore-centric Reits, he said.
Business Times
11-05-2025
- Business
- Business Times
Industrial S-Reits report NPI growth, but managers are cautious on outlook
SINGAPORE real estate investment trusts (S-Reits) with exposure to the industrial sub-segment have mostly reported growth in net property income (NPI) in the quarter ended March. The resilient operating performance comes as industrial S-Reits report stable occupancies and positive rental reversions in the most recent quarter. However, the Reit managers are more cautious on the outlook – with greater emphasis on tenant retention and cost management – given the challenging macroeconomic environment affected by global tariffs and trade uncertainty. Of the seven S-Reits that focus on the industrial sub-sector, three reported full-year results in the latest earnings season, while the others provided updates on their first-quarter performance. Mapletree Industrial Trust 's (MINT) distribution per unit (DPU) for FY25 ended March, rose 1 per cent to S$0.1357, on the back of higher gross revenue and NPI. The growth was driven by revenue contributions from the Osaka Data Centre and an acquisition in Tokyo, in addition to new leases and lease renewals of Singapore properties. However, MINT's manager said that higher property operating expenses and elevated borrowing costs may continue to exert pressure on distributions. It will adopt cost-mitigating measures and focus on tenant retention to maintain a stable portfolio occupancy level. Mapletree Logistics Trust (MLT) reported stable operating performance with 96.2 per cent occupancy and 5.1 per cent positive rental reversions in its fourth quarter. However, NPI slipped 1.6 per cent amid lower revenue contributions from China, absence of contributions from divested properties and a weakening of regional currencies against the Singapore dollar. 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 MLT's manager expects tenants to take a cautious approach to leasing and expansion amid global trade tensions, and its top priorities include ensuring tenant retention, portfolio resilience and cost management. It estimates that around 15 per cent of portfolio revenue comes from tenants that are engaged in export businesses. Elsewhere, Aims Apac Reit also reported stable portfolio occupancy and 20 per cent positive rental reversions for FY25. DPU grew 2.6 per cent to S$0.096 for the full year. The manager noted that the trust's healthy balance sheet with gearing of 28.9 per cent provides ample headroom to fund future growth initiatives and new acquisitions. Similarly, ESR Reit posted S$82.5 million in NPI for Q1 2025, a 31.3 per cent increase on year, mainly due to full-quarter contributions from acquired properties, completion of asset enhancement initiatives (AEIs) and higher contributions from existing properties. Distributable income (DI) increased 7 per cent on year to S$44.2 million in Q1 2025. The manager expects NPI and DI to increase in FY25, given full-year contributions from completed acquisitions and AEIs, and positive rental reversions. Sabana Industrial Reit reported 15.3 per cent positive rental reversion in Q1, continuing on four successive years of double-digit positive rental reversion. NPI rose 22 per cent to S$16 million, led by higher gross revenue. The Reit's manager noted that performance is expected to be challenged by disruptions in global trade and significant cost pressures from the potential imposition of US tariffs, and it remains focused on optimising portfolio occupancy. Daiwa House Logistics Trust (DHLT) reported a 2.7 per cent increase in NPI for its overall portfolio in Singapore dollar terms during Q1, mainly due to the acquisition of D Project Tan Duc 2, partially offset by weaker Japanese yen and lower contribution from Japan. DHLT's manager noted that trade tariffs have resulted in economic uncertainty globally, and it is monitoring the potential impact. Less than 10 per cent of DHLT's Japan tenants by gross rental income are involved in exporting of goods, while the property in Vietnam is anchored on a long 20-year lease that expires in 2043. Phillip Securities analysts noted last month that S-Reits in the industrial sub-sector may face a medium impact from higher tariffs, as manufacturing may decline, especially for tenants with cross-border activities. However, they added that reshoring or near shoring could boost local industrial demand. The analysts remain overweight on S-Reits as the sector is relatively resilient in a downturn, given that tenants are contractually required to pay rent. They noted that the sector could start benefiting from interest rate savings in 2025 and 2026. SGX RESEARCH The writer is a research analyst at SGX. For more research and information on Singapore's Reit sector, visit for the monthly S-Reits & Property Trusts Chartbook.
