Singapore’s Real Estate Investment Trusts (REITs) are witnessing a resurgence in investor interest, driven by attractive valuations and a favourable yield spread, according to a DBS Group Research report. As the second half of 2025 unfolds, retail REITs are expected to deliver the most robust organic growth, closely followed by logistics and data centre sectors. Office REITs continue to surprise with positive rental reversions, contributing to the sector’s overall appeal.
The growth in distributable income is anticipated to outpace net property income, signalling a positive shift influenced by interest rate dynamics. Mid-cap REITs, such as LREIT, EREIT, and ELITE, present value-up opportunities with high yields ranging from 6% to 9%.
CapitaLand Integrated Commercial Trust (CICT) has been highlighted as a standout performer, achieving a 3.5% year-on-year increase in its first-half distribution per unit (DPU) to 5.62 Singapore cents. This performance surpasses expectations due to strong rental reversions and reduced financing expenses. CICT’s acquisition of the remaining 55% stake in CapitaSpring Commercial is expected to provide accretive upside through master lease renewals in the financial years 2026–2027.
The trust’s strategic acquisitions, retail asset enhancement initiatives, and contributions from renewed Gallileo leases are projected to support a consistent 3% annual DPU growth. Analysts maintain a ‘buy’ rating for CICT, with a higher target price of SGD 2.50, implying a forecasted yield of 4.5% for the financial year 2025.
As Singapore’s REIT market continues to evolve, investors are poised to capitalise on the promising growth prospects across various sectors, reinforcing the market’s attractiveness, DBS Group Research said.
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