UOB Kay Hian’s latest research report, “2Q25 Round-Up: Poised for an Upturn,” reveals a positive outlook for Singapore Real Estate Investment Trusts (S-REITs) as the sector shows signs of recovery. The report, released on 26 August 2025, indicates that two out of 21 S-REITs under their coverage exceeded expectations, with CapLand Integrated Commercial Trust (CICT) and Parkway Life REIT (PREIT) leading the charge.
The report maintains an “OVERWEIGHT” rating for S-REITs, suggesting investors consider blue-chip options such as CapLand Ascendas REIT (CLAR), CapLand Ascott Trust (CLAS), Keppel DC REIT (KDCREIT), Keppel REIT (KREIT), and Lendlease Global Commercial REIT (LREIT). These recommendations are based on specific catalysts and target prices, with CLAR, for instance, having a target price of S$4.02.
The retail sector has benefited from resilient domestic consumption, bolstered by government vouchers, leading to positive rental reversions. Frasers Centrepoint Trust (FCT) reported an 8-9% rental reversion for FY25, whilst LREIT achieved a 10.2% reversion. Meanwhile, the office sector has seen limited supply supporting rental growth, with KREIT achieving a 12.3% positive rental reversion in the first half of 2025.
The report also notes that the Federal Reserve’s anticipated rate cuts in the second half of 2025 could further stimulate economic growth, providing a favourable environment for S-REITs. With strategic acquisitions and asset enhancements underway, the sector is well-positioned for an upturn.
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