CGS International Securities Singapore recently launched its Makan and Market Talk series, focusing on the resilience of Singapore Real Estate Investment Trusts (S-REITs) in the face of global economic volatility. The event, attended by clients, investors, and industry experts, provided a platform for discussing the current outlook for S-REITs, highlighting their potential as attractive income plays.
The panel, featuring experts such as Song Seng Wun, Economic Adviser at CGS SG, and Lock Mun Yee, Deputy Head of Research at CGS SG, delved into the macroeconomic challenges and opportunities facing S-REITs. Song noted that whilst a recession is unlikely, short-term slowdowns due to uneven US trade policies and geopolitical shifts remain a concern. He described Singapore as particularly sensitive to these global changes due to its high export-to-GDP ratio.
Lock highlighted that S-REITs are currently undervalued, with average yields of 6.1% and a price-to-book ratio below historical norms, making them appealing for investors seeking stability and income. She identified CapitaLand Ascendas REIT and Keppel DC REIT as preferred picks due to their strong balance sheets and strategic sector positioning.
The discussion also touched on the future of office spaces, with Calvin Yeo from Knight Frank Singapore noting that demand remains robust, particularly for green-certified and employee-centric buildings. Despite the rise of hybrid work, post-pandemic occupancy rates have stayed above 90%.
The event concluded with a consensus that S-REITs are well-positioned for recovery, supported by strong fundamentals and active asset management. The Makan and Market Talk series will continue to offer insights and analysis on pertinent market themes.
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