Singapore REITs Sector - OCBC Group Research 2026-03-13: Outlook Muddled By Middle East Conflict

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The FSTREI Index traded within a tight range of -0.2% to +1.6% during the first two months of the year. However, share price performance slumped into negative territory after the start of the Middle East conflict at the end of Feb 2026.

Although S-REITs are typically viewed as a defensive asset class, the surge in oil prices has raised concerns about inflation. As a result, expectations of rate cuts by the US Federal Reserve (Fed) have been pushed back, and long-end yields have risen. Based on the Fed funds futures, the market is now pricing in slightly less than one rate cut (~0.8) by the Fed in 2026, as compared to ~2.5 cuts previously expected at the end of Feb.

Fundamentals remain sound, but prolonged conflict may exert downward pressure on distributions and weigh on valuations

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Andy Wong OCBC Group Research | Ada Lim OCBC Group Research | https://www.iocbc.com/ 2026-03-13

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