S-REITs post resilient 1Q 2025 amid positive rent reversions and high occupancy
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.
1. $KEPPEL REIT(K71U.SI)$
Keppel REIT, a pure-play office S-REIT with mostly Singapore assets, reported positive rental reversion of 10.6% 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% on year to S$66.4 million in 1Q25.
$Lendlease Reit(JYEU.SI)$ also reported a 13% rental uplift for its Jem office lease, while Suntec REIT reported a positive rental reversion of 8% for its Singapore office portfolio in 1Q25, its 27th quarter of positive rent reversion.
2. $CapLand IntCom T(C38U.SI)$
CICT and $OUEREIT(TS0U.SI)$ posted rental reversions of 5.4% and 9.9% respectively for their office portfolios, while $Mapletree PanAsia Com Tr(N2IU.SI)$ achieved 2.2% at Mapletree Business City (MBC) and 7.4% at its other Singapore office assets.
Occupancy across S-REITs Singapore office portfolios remained healthy.
3. $Suntec Reit(T82U.SI)$
Suntec REIT’s office portfolio maintained high committed occupancy of 98.7%, while $KEPPEL REIT(K71U.SI)$ , OUE Reit and CICT similarly reported committed occupancies ranging between 96.3% and 97.9% for their Singapore office assets.
MPACT’s Singapore assets had occupancy ranging from 91.2% at MBC to 99.5% 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%.
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% quarter-on-quarter.
It noted that office demand should stay positive, driven by supportive government policies and businesses seeking to capitalise on Southeast Asia’s growing need for wealth management, fintech and AI 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.
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