Periodic/Sector reports
REITs: S-REITs Monthly Update (Aug 26)
OVERWEIGHT (Maintained)
Analyst
Highlights
- An influx of safe-haven liquidity and low domestic interest rates have led to a record volume of transaction for commercial properties, encompassing office and retail properties. Thus, the S-REIT sector is supported by firm asset valuation and continued low cost of debt.
- Maintain OVERWEIGHT. The S-REIT sector is a major laggard. Thus, S-REITs are likely to be more resilient in the event of a correction in the broader market: BUY CICT (Target: S$3.06), FLT (Target: S$1.33), MPACT (Target: S$1.75), NTTDCR (Target: US$1.31) and UIBREIT (Target: S$1.16).
Analysis
- The FSTREI corrected 4% in Aug 26, underperforming the STI's gain of 2.3%. Yield for 10-year Singapore government bonds was stable at 2.34%. US core PCE inflation was stable at 3.3% yoy in Jul 26.
- Singapore’s commercial real estate market is poised for a record year in 2026, with transaction volume reaching US$10.3b in 1H26 and a further US$6b of deals currently in the pipeline. Full-year volume is expected to surpass the previous record of US$13.1b achieved in 2019. The strong recovery was underpinned by robust overseas capital inflows, with international investors accounting for a sizeable share of market activities. Major transactions, such as CICT’s acquisition of Paragon and the sale of Asia Square Tower 2, boosted deal momentum. The resurgence reflects attractive rent growth and abundant liquidity, positioning Singapore as one of the strongest commercial property markets in the Asia Pacific region.
- Singapore’s office investment market is set to be highly active in 2H26, with several landmark assets being marketed for sale alongside the anticipated Marina One transaction. S$10.8b of office properties changed hands in 1H26, already exceeding the total transaction value recorded in full-year 2025. Major buildings in the market include Frasers Tower, where Frasers Property is seeking a buyer for its 50% stake valued at slightly over S$1b, 30 Raffles Place with a guide price of at least S$1.1b, and Lazada One, which is being offered at its S$755m valuation. Investor appetite is robust, as evidenced by the strong interest in Income Centre, which reportedly attracted a dozen bids.
Highlights
- An influx of safe-haven liquidity and low domestic interest rates have led to a record volume of transaction for commercial properties, encompassing office and retail properties. Thus, the S-REIT sector is supported by firm asset valuation and continued low cost of debt.
- Maintain OVERWEIGHT. The S-REIT sector is a major laggard. Thus, S-REITs are likely to be more resilient in the event of a correction in the broader market: BUY CICT (Target: S$3.06), FLT (Target: S$1.33), MPACT (Target: S$1.75), NTTDCR (Target: US$1.31) and UIBREIT (Target: S$1.16).
Analysis
- The FSTREI corrected 4% in Aug 26, underperforming the STI's gain of 2.3%. Yield for 10-year Singapore government bonds was stable at 2.34%. US core PCE inflation was stable at 3.3% yoy in Jul 26.
- Singapore’s commercial real estate market is poised for a record year in 2026, with transaction volume reaching US$10.3b in 1H26 and a further US$6b of deals currently in the pipeline. Full-year volume is expected to surpass the previous record of US$13.1b achieved in 2019. The strong recovery was underpinned by robust overseas capital inflows, with international investors accounting for a sizeable share of market activities. Major transactions, such as CICT’s acquisition of Paragon and the sale of Asia Square Tower 2, boosted deal momentum. The resurgence reflects attractive rent growth and abundant liquidity, positioning Singapore as one of the strongest commercial property markets in the Asia Pacific region.
- Singapore’s office investment market is set to be highly active in 2H26, with several landmark assets being marketed for sale alongside the anticipated Marina One transaction. S$10.8b of office properties changed hands in 1H26, already exceeding the total transaction value recorded in full-year 2025. Major buildings in the market include Frasers Tower, where Frasers Property is seeking a buyer for its 50% stake valued at slightly over S$1b, 30 Raffles Place with a guide price of at least S$1.1b, and Lazada One, which is being offered at its S$755m valuation. Investor appetite is robust, as evidenced by the strong interest in Income Centre, which reportedly attracted a dozen bids.
OVERWEIGHT (Maintained)
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
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