๐ Technically, Singapore REITs sector is consolidating at an important support level of FTSE ST REIT Index and trading close to the level during the COVID crash in Mar 2020. At the same time, the REIT index is forming an Inverted Head and Shoulders, a potential trend reversal pattern, with 200D SMA as neckline resistance.
๐ฅ Total Market Cap = S$86.45Billion ( โฌ๏ธfrom S$88.23 Billion)
๐ฏ Average Price/NAV = 0.76 (Maintain)
๐ฏ Average Distribution Yield = 5.99% (โฌ๏ธ from 6.27%)
๐ฏ Market Cap Weighted Average Distribution Yield = 6.08% (โฌ๏ธ from 6.17%)
๐ฏ Average Gearing Ratio = 39.94% (โฌ๏ธ from 39.80%)
๐น Average Yield Spread (vs 10 years SG Gov yield) = 3.95% (โฌ๏ธ from 3.93%)
๐๐๐น๐น / ๐๐ฒ๐ฎ๐ฟ ๐๐ฎ๐น๐น ๐ณ๐ผ๐ฟ ๐ฆ-๐ฅ๐๐๐ง ๐ฆ๐ฒ๐ฐ๐๐ผ๐ฟ (๐๐ป ๐๐ฒ๐ป๐ฒ๐ฟ๐ฎ๐น):
๐ฎValuation (24% discount to Market Fair Value)
๐ฎ๐ป Technical Momentum (trading near a strong support)
๐ฎ Interest Rate Direction (IF there is 50 bps cut by end 2025)
๐ปUS 10 Year Risk Free Rate @4.41% which has strong inversed correlation to REIT index.
More detail can be found here:
https://reitsavvy.com/insights/singapore-reits-monthly-update-19-jun-2025
Summary
Singapore REITs sector is trading within a range between 620 and 660. The US 10Y Risk Free Rate has decreased to 4.41%, while the SG 10Y Risk Free Rate decreased by 0.26%. Average yield spread is at 3.95% w.r.t to the SG Risk Free Rate.
Singapore REITs sector has very strong inversed correlation with US 10Y Risk Free Rate. For S-REIT to come back to live again, we need the US 10 year risk free rate to come down otherwise the performance of Singapore REIT index will continue to be muted.
Fundamentally, the S-REIT sector is trading at a 24% discount (5% if using weighted average) to its fair value, with an average trailing twelve-month (TTM) yield of 6.03%. This is very undervalued and at levels only seen previously in the March 2020 COVID crash.
According to the current Fed Fund Rate projections from the CME Group, the market expects a 25 basis point cut by Q3 2025. The cut in interest rate will help to boost the DPU of the REITs which have shorter debt maturity profile and higher percentage of floating rate. However, the impact will only be reflected in the financial statement probably in Q3 or Q4 2025.
Kenny Loh is a distinguished Wealth Advisory Director with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.
In addition to his advisory role, Kenny is an esteemed SGX Academy trainer specializing in S-REIT investing and regularly shares his insights on MoneyFM 89.3. He holds the titles of Certified Estate & Legacy Planning Consultant and CERTIFIED FINANCIAL PLANNER (CFP).
With over a decade of experience in holistic estate planning, Kenny employs a unique โ3-in-1 Will, LPA, and Standby Trustโ solution to address clientsโ social considerations, legal obligations, emotional needs, and family harmony. He holds double masterโs degrees in Business Administration and Electrical Engineering, and is an Associate Estate Planning Practitioner (AEPP), a designation jointly awarded by The Society of Will Writers & Estate Planning Practitioners (SWWEPP) of the United Kingdom and Estate Planning Practitioner Limited (EPPL), the accreditation body for Asia.
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