- The S-REITs Index fell 6.9% in March 2026, extending the 1.9% decline in February 2026. Suntec REIT (SUN SP, ACCUMULATE, TP S$1.63) was the only REIT in the green for the month, rising 2.8% following the completion of the acquisition of its REIT manager by Acrophyte Asset Management. KORE US REIT (KORE SP, non-rated) was the worst performer, falling 17.7% as it resumed dividends in 2H25 with a c.10% payout. Healthcare was the best-performing sub-sector for the month, declining 0.7%, while overseas commercial was the weakest, falling 12.9%.
- The S-REITs Index is now trading at a forward dividend yield spread of c.3.8% (mean) and a P/NAV of 0.9x (-1.1x s.d.). At these levels, valuations appear to have largely factored in downside risks stemming from the Middle East conflict, which has driven more hawkish interest rate expectations. Meanwhile, the impact of higher utility costs has been broadly contained, as most costs are either hedged or passed through to tenants.
- We reiterate our OVERWEIGHT recommendation on S-REITs, but are more selective. We favour names with strong balance sheets, earnings resilience, and potential for DPU growth. We think S-REITs’ share prices are supported by global fund flows into stable, defensive strategies, with the sector viewed as a safe-haven amid market volatility and heightened geopolitical tensions. Within sub-sectors, we prefer retail, where rental reversions are expected to remain robust in the high single-digits in 2026. Our top picks are high-yielding S-REITs (above 8.5%) with resilient portfolios, such as Stoneweg Europe Stapled Trust (SERT SP, BUY, TP €1.89), Elite UK REIT (ELITE SP, BUY, TP: £0.41), and United Hampshire US REIT (UHU SP, BUY, TP US$0.69). We also like Prime US REIT (PRIME SP, BUY, TP US$0.32), for its attractive valuation (0.34x P/NAV) and cash flow visibility.
Continue Reading
