---
title: S-REITs Opportunity After Rate Cut & Case Study of Sasseur REIT
description: Sneak peek behind the curtain! REITside Talk's new series grants exclusive access to REIT properties, offering relaxed explorations and expert interviews
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[2025](https://reitsavvy.com/insights/tag/2025)

# S-REITs Opportunity After Rate Cut & Case Study of Sasseur REIT

[By- Kenny Loh,](https://reitsavvy.com/insights/author/kenny-loh)

Kenny recently held a Live Stream Webinar on Tiger - To The Moon platform, with the topic 'S-REITs Rebound? Yield, Value and Outlook after Interest Rate Cuts — Insights with Sasseur REIT'. And together with him was, Cheng Hsing Yuen, Income CEO of Sasseur REIT.

[Rewatch the Tiger Live Stream on Oct 21, 2025](https://ttm.financial/m/live/1845931123455035/?name=RNLive&rndata=%7B%22liveId%22%3A%221845931123455035%22%2C%22type%22%3A1%7D)

 

![](https://community-static.tradeup.com/news/7da5d0c30c3916d03e79a25d9688c226)

###### 1. The Future of S-REITs: Catalysts and Opportunities in a Shifting Rate Environment

The landscape for Singapore REITs (S-REITs) is at a pivotal moment. With domestic and global interest rate trajectories signaling a shift, S-REITs are poised to benefit from multiple positive catalysts. This summary, based on insights from a recent live stream featuring Kenny Loh, a Private Wealth advisor and REIT specialist, and the incoming CEO of Sasseur REIT, delves into the market outlook, opportunities, and risks for retail investors.

**The Interest Rate Tailwinds**

The consensus on interest rates, both in Singapore and the US, indicates a downward trend, which is a significant boon for the S-REIT sector.

**1. Singapore's Rate Environment**

Singapore's **T-Bill, Fixed Deposit, and Singapore Savings Bond** rates have been trending downward, with many now below the 2% mark. The $10-year risk-free rate is also declining. This general decline in risk-free returns prompts yield-seeking retail investors to look for asset classes with higher returns, potentially driving capital into S-REITs, which currently offer an attractive average yield of around 5.5%.

![](https://community-static.tradeup.com/news/cf959479ee75b37652b98d28e9797164)

 

**2. US Rate Outlook and Global Impact**

The US interest rate direction has a major impact on S-REITs. Based on the FOMC dot plot and futures market projections, the US Federal Funds rate is expected to drop to approximately 3.75% by the end of 2025 and 2.5% by the end of 2026.

![](https://community-static.tradeup.com/news/53db7d8765a2e5162af559904a222528)

![](https://community-static.tradeup.com/news/d1dcff74db57817434f204ec3cf30e3b)

This expected interest rate reduction translates into four key benefits for S-REITs

- **Improved Distribution Per Unit (DPU):** Reduced interest expenses, especially for REITs with high financing costs or short debt maturity profiles, will directly boost DPU.
- **Property Valuation Rerating:** The inverse relationship between interest rates and property valuation suggests that falling rates will help improve property valuations and boost Net Asset Value (NAV).
- **Institutional Fund Flow:** S-REITs have an inverse correlation with the **US 10-year risk-free rate**. Since this rate is still high (stubbornly above 4%), institutional funds have been muted. A definitive break below the 4% level is expected to draw institutional money back into the Singapore REIT sector, boosting the market as a whole.
- **Yield-Seeking Investor Flow:** Local investors, faced with plunging low-risk returns (like T-Bills and fixed deposits), will be motivated to deploy cash into higher-yielding assets like S-REITs.

**Market Opportunity and Risk**

The current market presents a compelling valuation for S-REITs.

**Undervalued Sector**

The FTSE ST Real Estate Investment Trust Index is currently trading at a **Price-to-Book (P/B) ratio of $0.85 times** as of October, close to its five-year low of 0.8 times. This suggests the sector is generally **underpriced**, with a potential upside of approximately 25% to return to the pre-COVID P/B of 1.1 times.

![](https://community-static.tradeup.com/news/32fad388570aae208c6be4586d146663)

**Key Risks to Watch**

While the long-term outlook is bullish, the sector faces an immediate resistance level (Based on the chart of FTSE ST REIT Index). A near-term correction could occur if:

1. The US Federal Reserve does not cut interest rates as expected this month on Oct 29, 2025.
2. The current quarter's earnings reports from REITs are weaker than anticipated.

**S-REIT Opportunities by Investment Style**

Investors can consider S-REITs based on their risk profile and investment objective:

| **Category** | **Focus** | **Characteristics** | **Example Sponsors** |
| --- | --- | --- | --- |
| **Dividend Play** | Stable income | Large-cap, strong sponsor backing, stable DPU of 4-6% | **Mapletree, CapitaLand, Frasers** |
| **Alpha Play** | Growth and high yield | Small/Mid-cap, potential benefit from Singapore's Equity Market Development Program grant. High DPU (e.g., 7-9%). | **Sasseur REIT** |
| **Turnaround Play** | Deep discount, high risk | US Commercial Office sector, beaten down due to low occupancy/high rates. May have suspended dividends. | **N/A** |
| **Speculative Play** | Privatization potential | Small-cap, low trading liquidity, deeply underpriced. | **N/A** |

---

![](https://community-static.tradeup.com/news/286a9717dde35e28cf47c233569b7172)

 

![](https://community-static.tradeup.com/news/775b26a836a6da4eedca90524154053a)

![](https://community-static.tradeup.com/news/4891da1af7425f9e0c158942585cb353)

###### 2. Spotlight on Sasseur REIT: A Case Study

[$Sasseur Reit(CRPU.SI)$](https://ttm.financial/S/CRPU.SI) (Sasseur) was highlighted as an example of an **Alpha Play**, offering a compelling combination of high yield and low gearing.

 

![](https://community-static.tradeup.com/news/8cbff2fcde0a616bc23b2e5dcdae66e2)

Key Differentiators:

- **Attractive Metrics:** Sasseur REIT currently offers an attractive dividend yield of approximately 8.9% and maintains a low gearing ratio of 25.8%.
- **Outlet Mall Model:** As the first outlet REIT listed in Asia, its model focuses on discounted branded fashion and sportswear, appealing to China’s value-conscious consumers.
- **EMA Model for Stability:** The unique Entrusted Management Agreement (EMA) structure provides income stability. Its rental income includes a **fixed component** (set at IPO and increasing 3% annually), offering downside protection, and a **variable component** tied to tenant sales performance, capturing upside.
- **High Occupancy Strategy:** By partnering closely with tenants and using short lease terms (mostly 1-3 years), Sasseur REIT maintains agility to replace underperforming tenants and keep occupancy high (above 95%).
- **Growth Strategy:** Sasseur REIT's growth will be driven by maximizing performance of existing core assets and strategic acquisitions in China, potentially from distressed developers. The sponsor group is also exploring expansion opportunities in **Southeast Asia**, which could eventually be injected into the REIT.

![](https://community-static.tradeup.com/news/e1592b58d3ae19146192ac4dc13ee601)

![](https://community-static.tradeup.com/news/d83be8cd3743cfcb5a79cf400b3dcf50)

-  
  
  ![](https://community-static.tradeup.com/news/edf8622177a8bd9aa51d9ff3ccfeab40)
  
  ![](https://community-static.tradeup.com/news/57c3dabf6d7e1d8001c5d5f710e04767)
  
  ![](https://community-static.tradeup.com/news/558e034fc5caec5be053fb02ced62550)

Speaker of [@Kenny\_Loh](https://ttm.financial/U/3563967154363605)

 

![](https://community-static.tradeup.com/news/faeb1e66e63d909ba82bfbe8893a9d68)

 

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