- Amidst the market turmoil and volatility, the S-REITs sector has stood out with share prices holding up relatively better than broader indices, although they have not gone unscathed.
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- Secondly, institutions turned net buyers for four out of five trading weeks between 3 Mar to 4 Apr 2025 – marking a reversal of the outflows that the sector has experienced for much of 2024 according to the fund flow data from SGX.
Rising risks of a US and global recession have driven a meaningful pullback in benchmark interest rates.
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- In particular, the dip in interest costs has been steeper for Singapore and augurs well for the borrowing cost; hence the positive distribution per unit (DPU) outlook for S-REITs with sizeable exposure to Singapore assets.
- However, the decline in their financing costs is unlikely to be of the same magnitude at the onset given that S-REITs under our coverage have, on average, hedged 75% of their borrowings (as at 31 Dec 2024).
Valuations appear more attractive, while the defensive nature offers investors a good place to seek shelter.
- Read more at SGinvestors.io.
