The ongoing uncertainty due to tariffs and trade tensions has caused significant volatility in global markets over the past week, as investors take a risk-off approach.
Real estate investment trusts in Singapore (S-REITs) have not been spared from the weaker sentiment, with a large sell off last week, even though a temporary reprieve from certain tariffs was announced on April 9.
Since the “Liberation Day” tariffs were announced by US President Donald Trump on April 2, the iEdge S-REIT index has fallen 7.5% as of April 10, reversing the positive performance seen last month.
Even so, Singapore’s REIT benchmark has fared better than other major stock indices over the same period.
By comparison, the broader $Straits Times Index(STI.SI)$ fell 9.5% between April 2 and 10, while Hong Kong’s $HSI(HSI)$ and the broad-based $S&P 500(.SPX)$ on Wall Street are down 11.3% and 7.9% respectively in Singapore dollar terms.
While a broad economic slowdown globally would undoubtedly affect all sectors, S-REITs may offer investors some shelter, given their weak correlation with US and Global Equities.
The sector currently trades at a relatively high distribution yield, offering investors the prospect of income at a time where most other assets are facing significant uncertainty.
As of April 10, the average trailing 12-month yield from the S-REITs that currently pay distributions has risen to 7.3%, up from 6.9% as of end-February.
S-REITs that primarily hold overseas assets such as $Sasseur Reit(CRPU.SI)$ , $EliteComREIT GBP(MXNU.SI)$ , $Stoneweg Reit EUR(CWBU.SI)$ and $CapLand China T(AU8U.SI)$ currently rank among those with the highest distribution yield.
The iEdge S-REIT index also currently trades at a 12-month distribution yield of around 6%, above its 5-year historical average of 5.2%, Bloomberg data showed.
As global markets whipsawed over the past week amid various tariff headlines, retail investors were net buyers into the S-REITs sector in a possible sign of yield hunting.
Between April 7 to April 10, retail investors net bought S$92.5 million in S-REITs, with four trusts making the top 10 net retail buying leaderboard, including $Mapletree Log Tr(M44U.SI)$ , $CapLand Ascendas REIT(A17U.SI)$ , $Suntec Reit(T82U.SI)$ and $Mapletree Ind Tr(ME8U.SI)$ .
Institutional investors were net sellers of the sector over the same period, with net outflows of S$42.7 million. MLT, CapitaLand Integrated Commercial Trust (CICT) and Suntec REIT were among those with the highest net institutional outflows.
However, two trusts – Frasers Centrepoint Trust and CLAR – ranked among the top 10 in terms of net institutional inflows over the four trading days.
There were four trusts that booked both net institutional inflows and net retail inflows between April 7 and 10 – CLAR, $Lendlease Reit(JYEU.SI)$ , $CDL HTrust(J85.SI)$ and $CapLand Ascott T(HMN.SI)$ .
Apart from directly investing in individual S-REITs, some investors have also chosen to use ETF channels. Among the five REIT ETFs listed on SGX, $NikkoAM-STC Asia REIT(CFA.SI)$ $LION-PHILLIP S-REIT(CLR.SI)$ $NikkoAM-STC Asia REIT(CFA.SI)$ saw the largest inflows, with a combined net creation of S$25 million in new units between April 2 and 10.
During this period, the combined daily trading turnover of the five REIT ETFs exceeded S$10 million, tripling the average daily turnover in March 2025.
Analysts recommend that investors stay defensive in their allocation to S-REITs. Ongoing uncertainty from tariffs may impact some sub-segments more than others, either from portfolio geographic exposure, or from the nature of their assets, with those in consumer discretionary segments more vulnerable.
UOB Kay Hian analyst Jonathan Koh said earlier this month that the most defensive S-REITs are those exposed to suburban retail, healthcare, and data centres. S-REITs with long weighted average lease expiry (WALE) or lower gearing ratios could also prove more resilient, and his top picks include CICT, $ParkwayLife Reit(C2PU.SI)$ and $DigiCore Reit USD(DCRU.SI)$ .
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