Extreme climate events have financially impacted 58% of Singapore-listed Real Estate Investment Trusts (S-REITs) over the past three years, according to a joint study by Knight Frank and the REIT Association of Singapore (REITAS). The “Climate Readiness: From Disclosure to Asset Implementation” report examined sustainability practices across Singapore’s S$100b REIT market.
The study, which analysed sustainability reports from 40 S-REITs and surveyed 33 REIT managers, highlights the sector’s growing climate risk exposure. Nupur Joshi, CEO of REITAS, noted the industry’s progress in sustainability reporting and emphasised the need for concrete actions by REIT managers to support Singapore’s sustainable finance ambitions.
Key findings include that 70% of S-REITs anticipate green premiums for compliant buildings, whilst 42% have linked asset-level Environmental, Social, and Governance (ESG) Key Performance Indicators (KPIs) to financing instruments. Additionally, 78% of S-REITs have set carbon neutrality or net-zero targets, and all respondents reported board-level commitment to sustainability.
Jackie Cheung, Director of ESG at Knight Frank, stressed the urgency of asset-level adaptation strategies, stating, “Climate-related disruptions are no longer distant possibilities; they are happening now and directly affecting our industry.”
Despite progress, challenges remain. Only 20% of S-REITs have disclosed the severity of physical risks, and tenant resistance is cited as a significant hurdle by 55% of respondents. The study underscores the importance of integrating climate considerations into investment strategies to ensure long-term resilience and competitiveness.
