Source: MoneyFM 89.3 Midday Show - Money and Me
As we move into 2026, the Singapore REIT (S-REIT) landscape is undergoing a massive transformation. After years of battling a "high-for-longer" interest rate environment, the sector is finally seeing a resurgence. However, as I discussed on MoneyFM 89.3, the narrative has shifted from "Can they survive?" to "Who is actually thriving?"
If you missed the live segment, here is a summary of the key takeaways on why this recovery is fragmented and how investors should navigate the "new normal."
1. The "Refinancing Recovery" is Here
If 2024 was about survival and 2025 was about stabilization, 2026 is officially the year of the Refinancing Recovery. We have moved past the peak of the interest rate mountain. For the "Thrivers," this means the "cost-of-debt" drag is finally turning into a tailwind as they replace expensive debt with more favorable rates. $CapLand IntCom T(C38U.SI)$
2. Survivors vs. Thrivers: The Performance Gap
The market is no longer moving as one. We are seeing a clear divide in the landscape:
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The Survivors: These REITs are still in defensive mode. Characterized by high gearing (near 45%) and exposure to struggling global office markets, their goal is "damage control"—divesting assets to pare down debt.
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The Thrivers: These are the offensive players with "fortress balance sheets" and ICRs (Interest Coverage Ratios) above 3.5x. They aren't just paying dividends; they are recycling capital—selling low-yield assets to acquire high-growth ones like Data Centres and modern Logistics.
3. The "Singapore Shield" Effect
Is the tide rising for everyone? Not quite. We are seeing a fragmented recovery.
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The Winners: Domestic, Singapore-centric assets are benefiting from a "Singapore Shield." Limited supply and high demand in suburban retail and Grade-A CBD offices are driving positive rental reversions.
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The Laggards: REITs with heavy exposure to overseas commercial real estate (specifically B-grade offices in the US or China) are still facing "valuation gravity."
4. Top Property Sectors to Watch
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Data Centres & Logistics: Driven by the AI boom and supply chain shifts, these remain the structural favorites. $Keppel DC Reit(AJBU.SI)$ $NTT DC REIT USD(NTDU.SI)$
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Suburban Retail: The "defensive darling." With hybrid work here to stay, neighborhood malls are seeing higher occupancy and stickier spending than prime Orchard Road spots. $Frasers Cpt Tr(J69U.SI)$
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Hospitality: A strong recovery play as international visitor arrivals in Singapore hit new peaks. $CapLand Ascott T(HMN.SI)$
5. Looking Ahead: The Budget 2026 Wishlist
With the Singapore Budget around the corner, the investment community is looking for structural support to keep the sector competitive. My personal wishlist includes:
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Green Retrofitting Grants: Incentives to help REITs modernize older buildings into "Green" assets without diluting unitholder DPU.
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Land Tenure Clarity: For industrial REITs, clearer paths for 30-year lease extensions would provide a massive boost to Net Asset Value (NAV).
The Bottom Line for Investors
You can no longer "buy the index" and expect easy wins. In 2026, asset relevance is the new alpha. Focus on REITs that have the pricing power to pass on costs and the agility to recycle capital into high-growth sectors.
Listen to the full interview on MoneyFM 89.3 here: Money and Me: S-REITs are back, but not all recoveries are equal.
Kenny Loh is a distinguished MAS Private Wealth Advisor 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.
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