Singapore’s REIT market is shifting—do you know where the real yields are?
Industrial REITs in Singapore have long been a market favorite, with stable demand and inflation-linked leases. But with US tariffs looming and the critical August 1 date casting a shadow over trade flows and manufacturing rents, investors are watching first-half results closely for signs of a slowdown in the industrial REIT sector.
The S-REIT space is poised to have 2 IPOs: the most recent, NTT DC REIT and the upcoming Centurion REIT.
NTT DC REIT (NTDU.SI) is Singapore’s largest IPO since 2017, focusing on global hyperscale data centers with 6 properties initially (1 in Singapore, 4 in the United States and 1 in Austria).
Centurion Accommodation REIT is an upcoming S$1.8B listing focused on student and worker dormitories, with its initial portfolio comprising 14 properties: 5 purpose-built worker accommodation assets in Singapore and 9 purpose-built student accommodation assets (8 in the United Kingdom and 1 in Australia).
This is the original interview I had on Friday, July 18th, where I answered 8 questions which include:
I summarized the market in five key points:
Trend: The iEdge S-REIT Index moved sideways in the first half of the year. Technically, it’s forming an inverted head-and-shoulders pattern, a classic signal of a bottom. The index is now testing the resistance, and I’m watching closely for a breakout that could mark the start of a new uptrend. View my most recent Technical Analysis here.
DPU Divergence: Most REITs continued to see DPU declines from 2023-2024, but there is a potential turning point emerging in the most recent quarter.
Early Recovery: Some REITs have returned to positive growth, mainly attributable to interest rate cuts. The continued rate cuts should continue to bolster this growth.
Top Performers: Singapore REITs with local retail and office exposure led the pack, thanks to strong rental reversion and local consumption strength.
Valuation: As a whole, the sector remains about 20% below its historical price-to-book average (~4% undervalued when weighted by market cap), with average yields near 6% and a 4% risk premium over 10-year Singapore government bonds.
2 main points:
Operational:
With major central banks around the world (ECB, BoE, BoC) cutting rates, REITs stand to gradually benefit from lower financing costs.
But most REITs have high fixed rate debts (mainly around 70–80%) for the next 3–4 years, so the benefit won't be immediate.
It comes down to whether CFOs can seize the window to refinance and optimize capital structures.
T-Bill yields have accelerated its decline through 2025, from nearly 3% from the start of the year to 1.68% now
Market Sentiment:
The US risk-free rate remains elevated at around 4.45%, which is still weighing on institutional fund flows into REITs.
Meanwhile, I’ve seen retail investors return this year, attracted by declining T-bill yields (now ~1.8%).
This creates a “tug-of-war” dynamic between cautious institutions and yield-seeking retail flows.
Tariff uncertainty, particularly around the August 1 deadline, adds an additional layer of risk for REITs.
Despite strong fundamentals, the IPO underperformed expectations:
Valuation: At 1.05x P/B, the IPO was reasonably priced versus peers like Keppel DC REIT. Its yield was also competitive.
Post-IPO Weakness: Although the IPO was 9.8 times subscribed, follow-through buying was weak. A large 1.5 million share block was sold at $0.965, which could be institutional profit-taking.
Stabilization Efforts: Merrill Lynch purchased 18 million shares under the price stabilization mechanism, but the stock dropped below IPO price to $0.945.
Sentiment Shift: Retail investors began to panic-sell, and the short-term price pressure remains.
Institutional participation has been light in Singapore, which puts pressure on new listings to rely heavily on retail demand. Retail demand alone may not be enough to support the upcoming pipeline.
The upcoming S$1.8B Centurion Accommodation REIT will be a test.
Westlite Woodlands, one of Centurion Accomondation REIT's 5 worker dormitories in Singapore
Centurion Accomodation REIT is the first REIT in Singapore global student and worker accommodation. It is an upcoming S$1.8B listing focused on student and worker dormitories, with its initial portfolio comprising 14 properties: 5 purpose-built worker accommodation assets in Singapore and 9 purpose-built student accommodation assets (8 in the United Kingdom and 1 in Australia).
Existing Accomodation REIT listings include UK-listed Unite Group (UTG:LSE) (one of the largest student accommodation REITs) which trades at a Price/NAV of 0.94x, offers a dividend yield of 6.21%, and market cap ~£5.7 billion.
Investors should focus on rental yield and operational performance rather than hoping for NAV growth, since these are non-core, short-lease properties with lower luxury standards.
Centurion is already planning to inject its high-end Episode Macquarie Park property into the REIT. While this can support NAV in the short term, I believe depreciation and lease churn remain long-term concerns that management must actively manage.
The impact should be limited in the short term. We are still waiting for clarity on tariff implementation before making big moves like factory relocation or downsizing. Large tenants are unlikely to vacate leases suddenly, though I expect rental growth to slow. Generally, cutting capital expenditure and variable cost-cutting are easier options to cut costs as compared to relocation.
We have to look at whether the businesses involve the United States (US).
There are two main concerns:
Land Tenure: Industrial assets in Singapore often sit on short land leases (30–40 years), which leads to gradual NAV erosion.
Tenant Concentration: Smaller REITs that rely heavily on local SMEs are exposed to policy shifts and tenant risk. Look at tenant mix and lease expiry profiles.
Align with your investment goals:
For stable long-term income: Focus on large-cap REITs with consistent DPUs and strong sponsors
For growth/capital appreciation: Look for undervalued REITs with good fundamentals. They may have been hit by high interest rates, therefore there is room for growth.
REITs are not “fixed income”!
Note: The above analysis is Kenny's personal views and is NOT buy or sell recommendations of REITsavvy. Investors who would like to leverage his extensive research and years of Singapore REITs investing experience can approach him separately for a REITs Portfolio Consultation.
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 “3-in-1 Will, LPA, and Standby Trust” solution to address clients’ social considerations, legal obligations, emotional needs, and family harmony. He holds double master’s 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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