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Business Times
30-04-2025
- Business
- Business Times
S-Reits need to reveal clear strategies amid tariff uncertainty
[SINGAPORE] It is midway into the earnings season for Singapore-listed real estate investment trusts (S-Reits), with most of them having posted their Q1 results. Closely watched among investors and analysts is the impact that US tariffs will have on these S-Reits. They are also looking out for the Reit managers' plans to counteract the effect of the tariffs imposed by US President Donald Trump. The 'Liberation Day' tariffs announced on Apr 2 sparked a sell-off of S-Reits that week, although the sector has since rebounded. As at Wednesday's (Apr 30) close, the iEdge S-Reit index had climbed 8.7 per cent since Apr 9, when the tariffs took effect. As the earnings season progresses, most S-Reits with exposure to affected markets have acknowledged the potential drag from the tariffs on their financial results. However, more clarity is needed. Reit managers should go beyond general acknowledgments and provide concrete details about the specific sectors and assets exposed, and how they intend to respond to the potential fallout. Given the broad scope and global reach of the proposed tariffs, their long-term economic impact could be significant, especially if Trump proceeds with implementation. 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 For S-Reits, which are only now seeing a performance rebound amid easing interest rates, failing to address these risks in a meaningful way could undermine recent gains. Scant detail from S-Reits A total of 14 S-Reits had posted their Q1 results as of Apr 30. Many gave a brief overview on how they would be affected by the tariffs. In general, they seemed to feel that an economic slowdown would lead to tenants pulling back or hesitating on lease commitments. For instance, the manager of Mapletree Pan Asia Commercial Trust noted in its recent Q4 results that tenants had become more cost-conscious, and decision-making among them had 'slowed down quite a lot'. Others, such as CapitaLand Ascott Trust , offered more detail. Its Q1 business update disclosed that while the Reit might take a hit to the demand for lodging, its diverse mix of guests and longer-stay accommodation type would go some way to blunt the impact. Several Reit managers also said they would adopt a wait-and-see approach, given that the tariffs were announced a month ago, and there have been constant changes to their scope. The chief executive officer of Suntec Reit's manager, for example, said at a briefing on Suntec Reit's Q1 results that the Reit manager was watching for trends in retail tenant sales, with the tariffs having been implemented only in April. However, overall, S-Reit managers have so far offered few details on how the tariffs would hit their portfolios, and how they intend to address the fallout. These include specific details on the extent to which a Reits' assets may be affected, or how exactly the manager will mitigate the impact of the tariffs. For instance, Keppel Reit's business update for Q1 focused on its performance, but offered little by way of how the economic situation could affect its outlook. Far East Hospitality Trust's business update presentation for Q1 acknowledged that trade tensions could cloud economic outlook, but added that the outlook for tourism remained positive, with more visitors returning to Singapore post-pandemic, wooed by new attractions. Details – such as the extent to which a recovery in visitor arrivals would offset the negative economic outlook, or how the trust intends to respond to tourists spending less – would give investors a better understanding of the trust's strategy during this period. Granted, most S-Reits provide only business updates for their Q1 financial results. These are typically released as announcements on the Singapore Exchange, and do not give Reit managers much scope to share their outlook. Furthermore, not all Reits hold briefings for analysts or the media. Such platforms would otherwise provide an avenue for market watchers to probe Reit managers further on their strategies. Nevertheless, given how quickly the market moves in response to Trump's policy pronouncements – which the US president has changed several times now – it is imperative that S-Reits keep investors informed of their game plan should the worst happen. What Reit managers can do S-Reit managers can afford to provide more detail on their response to Trump's tariffs. Beyond acknowledging the tariffs' impact, they can explain the extent to which the tariffs will affect their bottom lines. They can also give more details on the specific assets or geographies which will be hit by the tariffs, and lay out scenarios based on the severity of the tariffs. Rather than say that they will adopt a 'wait-and-see approach', managers should go a step further to share active plans they may have to mitigate the impact of tariffs. This could be anything ranging from incentives to encourage tenants to commit to leases quickly, or more extreme measures like divesting of assets or rejigging their portfolio mix by subsectors or geographies. While their Q1 business updates may not be the best platform to share these plans, Reit managers can look for alternative platforms, such as upcoming annual general meetings or Singapore Exchange announcements, to do so. Such moves would quell investor concerns during a turbulent economic period and instill confidence in the Reit management. There is still some way to go until the end of the current earnings season. With S-Reit performances expected to see an uptick overall due to lower interest rates, it would do them good to keep the positive momentum going.
Business Times
27-04-2025
- Business
- Business Times
S-Reits rebound from early April sell-off
[SINGAPORE] Real estate investment trusts in Singapore (S-Reits) have rebounded strongly over the past two weeks, in line with the broader recovery in the Singapore market following the sell-off in early April. As at Thursday's (Apr 24) close, the iEdge S-Reit index has climbed 5.9 per cent since Apr 11, with all 30 constituents ending flat or higher. S-Reits with international exposure, as well as those holding hospitality assets, ranked among the top performers. Over the past two weeks, the top 10 performers in the iEdge S-Reit index mostly saw net institutional inflows, with these counters receiving a combined S$23.3 million in net institutional inflows from Apr 14 to 24. However, institutional and retail investors were net sellers of the broader S-Reits sector over the same period. From Apr 14 to 24, institutional investors net sold S$36.6 million in S-Reits, bringing their total net outflows for the sector to S$465.1 million for the year-to-date. Meanwhile, retail investors net sold S$64.4 million over the same period, reversing net buying activity earlier this month. For the year-to-date, retail investors remain net buyers of the S-Reits sector, with total net inflows of S$261.9 million. CapitaLand China Trust (CLCT) ranked among the top three iEdge S-Reit index constituents over the past two weeks, with its units rising over 11 per cent from Apr 14 to 24. 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 CLCT's first-quarter business update on Apr 24 showed that it maintained high occupancy for its retail portfolio of 97.7 per cent, with positive rental reversions of 0.5 per cent. The Reit's business parks also had stable occupancy of 83.7 per cent, while logistics parks saw 95.7 per cent occupancy. The CEO of CLCT's manager noted in a recent SGX kopi-C interview that CLCT's malls mainly serve China's middle-income consumers, and the tenants have little dependence on US-imported products. He added that although US tariffs have introduced volatility to capital markets, the direct impact on CLCT's operations remains minimal. Elsewhere, Mapletree Logistics Trust's (MLT) full-year results, released on Apr 23, showed stable operating performance with 96.2 per cent occupancy as at end-March, and positive rental reversion of 5.1 per cent for Q4. The Reit recorded positive rental reversions in all markets except China. MLT's manager noted that the diversified portfolio mitigated headwinds from higher borrowing costs and China weakness. MLT's manager added that the changing trade policy landscape is unprecedented and evolving, and tenants are expected to take a cautious approach to leasing and expansion in the short term. However, the majority of MLT's tenants are serving local domestic consumption, accounting for around 85 per cent of portfolio revenue as at its Q4. MLT's units rebounded 7.4 per cent from Apr 14 to 24, ranking it among the top 10 index performers. Similarly, Suntec Reit units also gained 7.4 per cent over the same period. The Reit, which also announced its Q1 business update on Apr 24, reported improved distributable income (DI) for the period ended March, rising 4.3 per cent on year to S$45.9 million. Distribution per unit was also 3.4 per cent higher year on year for Q1. The manager noted that DI was improved due to lower financing costs as well as better operating performance, with all properties – except for 55 Currie Street, Adelaide – registering stronger operating performance. Some 13 S-Reits have already released their financial results or business updates for the financial period ended March. Another 12 S-Reits are expected to release their latest filings this week, including STI constituents CapitaLand Ascendas Reit , Mapletree Industrial Trus t, and Frasers Centrepoint Trus t. SGX RESEARCH 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.
