新加坡市场2025年展望：3种投资主题应对波动

The S-REIt sector experienced a lackluster 2024, affected by higher financing costs and inflationary pressures. Historically, S-REIt share prices have shown a strong negative correlation with risk-free rates, especially sensitive during turning points in the economic cycle. When interest rates decline, S-REITs tend to see substantial price appreciation.

Over the past two years, S-REITs faced competition from other yield products like t-bills, which offered rates around 4% to 3%. However, this has now reversed with growth returning for S-REITs with S-REIt yields at ~6.2% comfortably trade above Singapore bank yields, at ~5.6% according to JPm.

Therefore, we anticipate that S-REITs will outperform in 2025 compared to 2024, as interest rates have begun to fall from their highs. Lower borrowing costs, coupled with a return to normal demand following the post-COVID-19 recovery in 2020/2021, should lead to moderate improvements in rental returns across retail, office, and industrial segments, benefiting S-REITs. However, given more cautious expectations regarding Fed rate cuts by the end of 2025, investors should steer clear of highly leveraged REITs or those with weak profit outlooks or lacking profit catalysts.