To The Moon

S-REITs hitting fresh 52-week highs in 2025 is proof that yield still matters, even in a world obsessed with AI stocks and big tech breakouts. The SGD 400 million in net retail inflows is telling—Singaporeans love their dividends, and the stability of S-REITs has become a kind of financial comfort food in an uncertain world. But while retail investors are buying in droves, institutions have quietly taken the other side of the trade, offloading over SGD 500 million in the first half of the year. This sharp divergence begs the question: are we looking at true dividend kings or just value traps in disguise?

Which REITs have room to grow?

Not all S-REITs are created equal. Data centre and logistics-focused names like Keppel DC REIT, Mapletree Logistics Trust, and Ascendas REIT stand out with secular growth drivers—think cloud adoption, e-commerce, and digital infrastructure. These REITs have shown they can raise rents, acquire strategically, and grow distributions even in a slower economic backdrop. On the flip side, retail and hospitality REITs—while rebounding with tourism and post-COVID recovery—face headwinds from consumer caution and higher operating costs, making them riskier at current highs.

Retail vs. Institutional—whose side are you on?

This is where it gets tricky. Retail flows into REITs tend to be sticky, driven by the hunt for yield and stable cash flow. Institutions, however, are often more focused on relative value and macro risk: if they see better returns in equities, or worry about rising rates or slowing property values, they’ll rotate out. Personally, I lean more toward the institutional view at 52-week highs. It’s not that S-REITs are going to collapse, but the risk/reward is less attractive after a strong run and with rate cuts potentially on the horizon—if yields fall, the premium over government bonds could narrow fast.

Do S-REITs lack growth compared to equities?

Yes and no. S-REITs rarely deliver the explosive upside of growth stocks, especially in tech or new economy sectors. But the best ones do offer a blend of stable income and moderate capital gains, with lower volatility. Over the long run, this can be a winning combination, especially for income-focused investors or those nearing retirement. The real value trap is in lower-quality REITs that can’t grow distributions or are over-leveraged; these will struggle if the property market cools or rates move against them.

What percentage of my portfolio for REITs?

For most diversified investors, 10–20% in REITs makes sense, depending on income needs and risk appetite. Too much exposure and you risk missing out on higher-growth opportunities elsewhere; too little and you might sacrifice stability and yield. In a market at highs, trimming positions and recycling gains into other sectors—or even holding more cash for a future dip—isn’t a bad move.

Bottom line:

The “dividend king” REITs still have a role, but with both prices and inflows at extremes, don’t ignore the risks. Selectivity is key, and chasing yield at any price rarely ends well. I’m taking some profits here, watching for a reset, and focusing on the highest-quality, best-managed S-REITs with room to grow. Value trap or not, discipline is everything at all-time highs.