· We value Lion-Phillip S-REIT ETF (SREITS) using a combination of historical dividend yield spread and price-to-book ratios. The prices are S$0.89 and S$0.91, respectively, using these two valuation methods. We maintain our ACCUMULATE recommendation by assigning equal weight to both valuations; we decrease our target price to S$0.90 (previously S$0.965).
· CapitaLand Integrated Commercial Trust and CapitaLand Ascendas REIT have entered as the top two, replacing Mapletree Pan Asia Commercial Trust and Frasers Logistics & Commercial Trust, while Mapletree Logistics Trust remains, but at a slightly lower weight. SREITS remains well-diversified across eight sectors, with industrial at 37.8% as the largest.
· Following the Fed’s remarks easing concerns over inflation from higher energy prices and reinforcing expectations of eventual rate cuts, we see a more constructive outlook for S-REITs. It should support further interest cost relief, underpinning stronger DPU growth into FY26.
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