Market Overview & Key Developments
The latest monthly update highlights a series of challenges and opportunities in the S-REIT space amid continued global economic uncertainty. With weak economic numbers and efforts to rein in fiscal spending lowering US government bond yields, blue‐chip S-REITs have corrected and are now trading at attractive yields between 6% to 7%. The market remains OVERWEIGHT on these REITs with a list of recommended buys that span across retail, data centre, healthcare, and diversified sectors.
Key drivers include a potential privatisation move by PGNREIT – where sponsor Cuscaden Peak Investments has proposed a cash offer at S\$0.98 per unit, representing a modest 8% premium over similar transactions. An asset enhancement initiative, involving capex of S\$300m-600m over 3-4 years, is expected to facilitate refurbishment upgrades. In addition, Far East HTrust (FEHT) has deployed debt headroom to secure a strategic acquisition of an upscale hotel in Japan, while MUST advances its deleveraging agenda via the divestment of a New Jersey office asset.
Detailed Company Analysis
1. CapLand Int Comm Trust (CICT)
Recommendation: BUY | Current Price: S\$1.97 | Target Price: S\$2.37
CICT stands out as a flagship pick with a robust market capitalization of approximately S\$10,638 million. With attractive yield metrics – trading at a historical yield of 5.5% and a forward yield close to 5.7% – the trust positions itself as a premium play in the diversified S-REIT landscape. Its healthy coverage ratios and moderate leverage underline its stability in a trading environment marked by corrections. The strategic overweight stance on S-REITs further reinforces confidence in the trade‐off between attractive distribution yields and relative risk.
2. CapLand Ascott (CLAS)
Recommendation: BUY | Current Price: S\$0.86 | Target Price: S\$1.38
A prominent name in the hospitality space, CapLand Ascott is recommended for investors seeking exposure to upscale property portfolios. With a market capitalisation of S\$2,425 million, CLAS is positioned to benefit from asset enhancement initiatives that are expected to boost its value proposition. The trust enjoys backward and forward yield figures around 6.1% to 7.1%, which highlights its potential to deliver consistent income while capitalising on a premium market stance, even as its upscale status faces competitive challenges.
3. Mapletree Log Trust (MLT)
Recommendation: HOLD | Current Price: S\$1.23 | Target Price: S\$1.35
Mapletree Log Trust, with a market cap of S\$4,611 million, is currently on hold. The trust’s yields, registering in the 8.2% range, reflect a balanced performance in an industrial sector that remains solid but is not expected to significantly outperform peers. Its valuation and yield spread benchmark closely with market averages, warranting a cautious approach rather than an active repositioning.
4. Mapletree Pan Asia (MPACT)
Recommendation: BUY | Current Price: S\$1.18 | Target Price: S\$1.60
Focusing on the dynamic Pan Asia region, Mapletree Pan Asia commands a market cap of S\$4,599 million. The trust is recommended for its growth potential in diversifying across the Asian property environment. With yield figures indicating strength in its asset performance, MPACT’s forward-looking metrics ensure that the trust remains an attractive pick for investors eager to benefit from regional expansion trends.
5. Mapletree Ind Trust (MINT)
Recommendation: BUY | Current Price: S\$1.98 | Target Price: S\$2.70
Mapletree Ind Trust is a recommended buy with a focus on industrial properties. Its market cap of S\$4,173 million paired with a forward yield that sits among the attractive peers makes it a compelling long-term asset. As industrial REITs continue to benefit from infrastructure and logistics trends, MINT’s performance metrics underscore its stable growth prospects.
6. Keppel DC REIT (KDCREIT)
Recommendation: BUY | Current Price: S\$2.07 | Target Price: S\$2.53
As a data centre REIT, Keppel DC REIT is riding the boom in demand for digital infrastructure. Representing a market cap of S\$3,455 million, this trust trades with historical yields of 10.6% and forward yields that climb to 12.0%. Its strong operational metrics, evidenced by healthy coverage ratios and moderate leverage, make KDCREIT an essential buy for exposure to a rapidly evolving technology-driven asset class.
7. Frasers Centrepoint Trust (FCT)
Recommendation: BUY | Current Price: S\$2.05 | Target Price: S\$2.79
Operating within the retail space, Frasers Centrepoint Trust commands a market cap of S\$2,758 million. Boasting robust yield levels at around 12.0%, FCT is well-positioned to benefit from resilient consumer spending patterns. The trust’s performance and strategic positioning in the retail sector justify its BUY rating, providing a balanced mix of income generation and capital appreciation potential.
8. Suntec REIT (SUN)
Recommendation: HOLD | Current Price: S\$1.14 | Target Price: n/a
Suntec REIT, with a market capitalization of S\$2,475 million, is being held as investors await clearer trends in demand for its property portfolio. Its yields in the 6.3% to 6.8% range indicate moderate performance. Investors are advised to continue monitoring the trust amid a cautious market backdrop.
9. Frasers L&C Trust (FLT)
Recommendation: BUY | Current Price: S\$0.835 | Target Price: S\$1.26
Frasers L&C Trust, trading at a market cap of S\$2,324 million, is rated as a BUY. With robust yield attributes between 6.1% and 6.4%, FLT is seen as an attractive player for investors targeting consistent distributions alongside capital stability. Its diversified portfolio further supports the recommendation.
10. Keppel REIT (KREIT)
Recommendation: BUY | Current Price: S\$0.80 | Target Price: S\$1.06
Keppel REIT is another strong contender in the office property space. With a market cap of S\$2,291 million and a current yield performance of around 5.7%, KREIT offers value through its solid tenant base and market positioning. The BUY rating is reinforced by its potential for capital appreciation in a recovering office market.
11. Paragon REIT (PGNREIT)
Recommendation: NR (No Rating) | Current Price: S\$0.965
Paragon REIT is currently not rated as the trust navigates a transitional phase. Under the spotlight is the proposed privatisation offer by sponsor Cuscaden Peak Investments at S\$0.98 per unit. Despite PGNREIT’s premier upscale positioning, competitive challenges and the sizeable asset enhancement initiative weighing on its outlook have led to a neutral stance for the time being.
12. PLife REIT (PREIT)
Recommendation: BUY | Current Price: S\$3.79 | Target Price: S\$4.85
Specialising in the healthcare sector, PLife REIT’s compelling yield dynamics – with historical yields around 14.8% and forward yields reaching 17.7% – make it one of the most attractive plays in this space. With a market cap of S\$1,829 million, PREIT offers both income stability and growth potential, spurring its BUY recommendation.
13. ESR REIT (EREIT)
Recommendation: NR | Current Price: S\$0.24
ESR REIT, trading with a market cap of S\$1,428 million, is currently not rated. Its yield performance is modest, and without a target price, the focus remains on monitoring its operational outcomes in an evolving market.
14. OUE REIT (OUEREIT)
Recommendation: NR | Current Price: S\$0.275
With a market cap of S\$1,119 million, OUE REIT has not been assigned a rating at this time. Its yield and valuation metrics continue to be observed as it seeks to strengthen its position in the competitive office space sector.
15. Lendlease REIT (LREIT)
Recommendation: BUY | Current Price: S\$0.505 | Target Price: S\$0.72
Lendlease REIT is recommended as a buy based on its stable balance sheet and attractive yield outlook. With a market cap of S\$906 million and yield indicators that lend credence to its income-generating capacity, LREIT is positioned to benefit from market recovery signals. Its moderate leverage further enhances its investment appeal.
16. Stoneweg REIT (SERT)
Recommendation: NR | Current Price: €1.50
Operating in Europe, Stoneweg REIT has a market cap of approximately €875 million. With no rating at present, investors will be watching its yield evolution and capital preservation measures in an environment of tightening valuations.
17. CapLand China Trust (CLCT)
Recommendation: NR | Current Price: S\$0.665
CapLand China Trust manages a portfolio valued at S\$846 million. Although it remains un-rated, its performance is closely monitored by industry participants for any signs of improvement in yield spreads and asset quality in the China-focused property market.
18. Starhill Global (SGREIT)
Recommendation: NR | Current Price: S\$0.485
With a market capitalization of S\$822 million, Starhill Global has not been assigned a rating, reflecting investors’ wait-and-see approach as it navigates competitive pressures in the diversified REIT space.
19. Far East HTrust (FEHT)
Recommendation: BUY | Current Price: S\$0.545 | Target Price: S\$0.77
Rounding off the top picks is Far East HTrust, a hospitality REIT that has recently made a strategic move into Japan. With a market cap of S\$813 million, FEHT is acquiring the upscale Four Points by Sheraton Nagoya at an initial purchase price of ¥6.0
