OVERWEIGHT (Maintained)
Analyst
Highlights
- S-REITs are actively recycling assets, supported by advantageously low domestic interest rates. The sector is defensive and provides an attractive yield spread of 3.2%, which is in line with the long-term mean.
- Maintain OVERWEIGHT. The S-REIT sector is a major laggard. BUY blue-chips that are catching up with the broader market: CICT (Target: S$3.06), FLT (Target: S$1.30), MPACT (Target: S$1.75), NTTDCR (Target: US$1.43) and UIBREIT (Target: S$1.16).
Analysis
- The FSTREI rose 3.0% in Jul 26, underperforming the STI's gain of 8.9%. Yield for 10-year Singapore government bonds rose 31bp mom to 2.31%. US core PCE inflation eased 0.1ppt mom to 3.3% yoy in Jun 26.
- CLAR has agreed to divest Kim Chuan Telecommunications Complex, a 10-storey data centre located at 38 Kim Chuan Road, for S$200m to an unrelated third party. The sale price is double CLAR’s original acquisition cost of S$100m in 2005 and represents a 32% premium to independent valuation of S$151.8m as of Jun 26. The divestment reflects CLAR’s disciplined capital recycling strategy, enhancing financial flexibility and enabling reinvestment into higher-yielding opportunities. The estimated net proceeds of S$180m could be used to fund investments, repay debt, support working capital or potential distributions. It reduces pro forma aggregate leverage from 42.0% to 41.4%. The transaction is expected to complete in 2Q26.
- Celine Tang was appointed Chairman and Non-Executive Director of Suntec Trust Management, the manager of SUN, with effect from 10 Jul 26, following the completion of the Tang family’s acquisition of the REIT manager through Acrophyte Asset Management. The board stated that her appointment would strengthen leadership and enhance the board’s effectiveness given her extensive real estate experience. Celine previously served as Group Managing Director of SingHaiyi Group, Non-Executive Chairman of Chip Eng Seng Corporation (now Tang Organisation) and OKH Global. Her appointment is a significant milestone in the Tang family’s stewardship of SUN and is expected to bring strategic direction and a stronger sponsor alignment.
Highlights
- S-REITs are actively recycling assets, supported by advantageously low domestic interest rates. The sector is defensive and provides an attractive yield spread of 3.2%, which is in line with the long-term mean.
- Maintain OVERWEIGHT. The S-REIT sector is a major laggard. BUY blue-chips that are catching up with the broader market: CICT (Target: S$3.06), FLT (Target: S$1.30), MPACT (Target: S$1.75), NTTDCR (Target: US$1.43) and UIBREIT (Target: S$1.16).
Analysis
- The FSTREI rose 3.0% in Jul 26, underperforming the STI's gain of 8.9%. Yield for 10-year Singapore government bonds rose 31bp mom to 2.31%. US core PCE inflation eased 0.1ppt mom to 3.3% yoy in Jun 26.
- CLAR has agreed to divest Kim Chuan Telecommunications Complex, a 10-storey data centre located at 38 Kim Chuan Road, for S$200m to an unrelated third party. The sale price is double CLAR’s original acquisition cost of S$100m in 2005 and represents a 32% premium to independent valuation of S$151.8m as of Jun 26. The divestment reflects CLAR’s disciplined capital recycling strategy, enhancing financial flexibility and enabling reinvestment into higher-yielding opportunities. The estimated net proceeds of S$180m could be used to fund investments, repay debt, support working capital or potential distributions. It reduces pro forma aggregate leverage from 42.0% to 41.4%. The transaction is expected to complete in 2Q26.
- Celine Tang was appointed Chairman and Non-Executive Director of Suntec Trust Management, the manager of SUN, with effect from 10 Jul 26, following the completion of the Tang family’s acquisition of the REIT manager through Acrophyte Asset Management. The board stated that her appointment would strengthen leadership and enhance the board’s effectiveness given her extensive real estate experience. Celine previously served as Group Managing Director of SingHaiyi Group, Non-Executive Chairman of Chip Eng Seng Corporation (now Tang Organisation) and OKH Global. Her appointment is a significant milestone in the Tang family’s stewardship of SUN and is expected to bring strategic direction and a stronger sponsor alignment.
OVERWEIGHT (Maintained)
Analyst
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