KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
As we cross the halfway mark of 2025, Singapore’s REIT market continues to demonstrate its dual strengths—defensive income and thematic growth. Despite the US Federal Reserve maintaining rates, S-REITs have outperformed expectations, buoyed by declining domestic interest rates and resilient sector fundamentals.
Top Performers YTD: Sector Themes Emerging
Three names have led the S-REIT pack in 1H25, each anchored by different macroeconomic drivers:
- Frasers Hospitality TrustYTD Gain: 21.4% | Yield: 3.10%Frasers Hospitality Trust is riding the post-pandemic travel rebound. Improving occupancy and rising room rates have driven both earnings and investor sentiment. While the yield is lower than peers, capital gains reflect renewed confidence in global tourism.
- CapitaLand Integrated Commercial Trust (CICT)YTD Gain: 13.8% | Yield: 5.0%As Singapore’s flagship retail and office REIT, CICT benefits from consistent consumer footfall and strong leasing activity in Grade A office spaces. Its integrated model provides stability in earnings and a dependable dividend stream.
- First REITYTD Gain: 10.7% | Yield: 8.7%First REIT, with a healthcare-focused portfolio across Southeast Asia, stands out as a high-yield defensive play. Long-term leases and essential service exposure insulate it from macro volatility—appealing in an uncertain geopolitical and trade environment.
Broader Market Trends: Sub-Sectors Show Resilience
Other S-REITs also reflect sector-specific strength:
Frasers Centrepoint Trust (J69U.SG): Steady suburban mall demand supports rental stability.
ParkwayLife REIT (C2PU.SG): Aging demographics and healthcare demand underpin predictable cash flows.
CapLand Ascendas REIT (A17U.SG) & AIMS APAC REIT (O5RU.SG): Industrial/logistics names are supported by structural e-commerce and supply chain resilience.
Keppel DC REIT (AJBU.SG): Digitalisation continues to drive demand for data centres, placing Keppel DC in a long-term growth runway.
Keppel DC’s STI Inclusion: Institutional Tailwind
Keppel DC REIT’s recent inclusion in the Straits Times Index marks a pivotal milestone, cementing its place among Singapore’s blue-chip assets. With a YTD gain of 5.9% and a 4.3% yield, the REIT is poised to benefit from institutional inflows, index-linked fund buying, and rising AI/data infrastructure demand.
Interest Rates: The Quiet Catalyst
Singapore’s 3-month SORA fell from 3.02% to 2.08% in H1 2025, significantly reducing S-REITs’ financing burdens and making dividend yields more attractive relative to fixed income. The anticipated global rate-cut cycle, should it materialise in H2 2025, could further elevate REIT valuations.
Investment Outlook: Sector Rotation and Selectivity Key
Looking ahead, the S-REIT market is well-positioned to capture a broad spectrum of investment themes:
Hospitality REITs may continue to benefit from global travel recovery.
Healthcare REITs offer yield visibility and inflation protection.
Data Centre REITs ride secular digital demand.
Retail/office hybrids like CICT may capture upside from economic resilience and asset repricing.
With macro clarity and yield-seeking behaviour still dominant, S-REITs remain a critical component in a diversified income portfolio. Investors should monitor rate trends, geopolitical developments, and sector-specific catalysts to navigate the second half of the year.
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