Singapore REIT News Analysis [1st Week of May 2025]

Market Trends

The week of April 28 to May 4 2025 revealed mixed signals for the REIT market amid broader market volatility and economic uncertainties.

Wall Street stocks advanced during this period, with the second straight week of gains fueled by strong economic data and potential easing of trade tensions (Reuters 1). However, this positivity was tempered by ongoing concerns about President Donald Trump's trade policies, which continued to inject uncertainty into global markets.

Singapore REITs showed resilience during this period, continuing their recovery that began in mid-April. The iEdge S-REIT Index had experienced a significant rebound of 9.5% from April 9 lows, demonstrating the sector's ability to recover from broader market volatility (SGX2). This recovery came despite persistent concerns about higher interest rates and global trade disruptions.

In the commercial property sector, divergent performance was evident across different segments. Office REITs in Singapore's Core Central Business District (CBD) showed renewed vigor in Q1 2025 after four quarters of stagnation, indicating an uptick in the office rental market (AInvest3). However, challenges remained in occupancy rates, with several major REITs reporting decreases in portfolio occupancy during the first quarter.

The China property market continued to face challenges, with First Sponsor reporting that weak market sentiments in Q1 2025 continued to impact their property development business despite the Chinese government's easing of property-related measures and implementation of pro-market fiscal and monetary policies in late 2024 (Business Times7). The company remains cautiously optimistic about gradual market recovery on the back of continued government support.

Currency fluctuations emerged as a significant factor affecting REIT performance during this period, with First REIT reporting lower distribution per unit (DPU) primarily due to the depreciation of Indonesian rupiah and Japanese yen against the Singapore dollar (Yahoo News8). This highlights the importance of forex risk management for REITs with international portfolios.

Overall, the April 28 to May 4 2025 period demonstrated a REIT market navigating complex economic conditions. Performance varied significantly across sectors and geographies, and investors closely monitored interest rate trajectories and trade policy developments.

Portfolio Activities

Stoneweg European REIT – Commenced share buyback programme, acquiring 50,000 units from the market. The buyback serves as a flexible and cost-effective capital management tool aimed at enhancing returns on equity and net asset value (NAV) per unit (The Edge Singapore9)
Elite UK REIT – Completed divestment of Crown Buildings, Caerphilly at £710,000, achieving an 18% premium to valuation (Yahoo News10)
CapitaLand Ascendas REIT – Reported discussions with a prospective tenant to lease vacant 94 Lenore Drive logistics property in Sydney, and secured commitment for part of the vacant space in 108 Wickham Street, Brisbane. Also announced commencement of asset enhancement initiative for 5005 & 5010 Wateridge property in San Diego in Q2 2025 (Business Times4)
Elite UK REIT – Achieved a 24% rental reversion for the medical centre tenant at Ladywell House, Edinburgh, demonstrating the REIT's ability to capitalize on favorable market dynamics (Yahoo News10)
First Sponsor – Reported ongoing completion of redevelopment projects including Puccini Hotel Milan and Prins Hendrikkade Amsterdam, as well as renovation of Le Meridien Frankfurt, which are expected to enhance recurring income from the European property portfolio (Business Times7)
Elite UK REIT – Identified potential monetisation opportunity for Peel Park, Blackpool, and discovered latent value in Lindsay House, Dundee, with plans for strategic asset enhancement (Yahoo News10)

Financial Updates

First REIT – Q1 DPU declined 3.3% year-on-year to S$0.0058, primarily due to depreciation of Indonesian rupiah and Japanese yen against the Singapore dollar. Net property and other income was 2.8% lower at $24.6 million, with distributable amount falling 2.2% to $12.2 million (Yahoo News8)
Sabana REIT – Posted 26.5% higher Q1 DPU at S$0.0086, supported by 27% higher distributable income of S$9.8 million. Net property income grew 22% to S$16 million, while revenue increased 4.6% to S$29.1 million on the back of higher occupancy and rental reversions (Business Times11)
CapitaLand Ascendas REIT – Reported positive rental reversions of 11% in Q1 2025 despite portfolio occupancy dipping 1.3% quarter-on-quarter. Australia recorded the highest rental reversions at 59%, followed by the US at 10.3% and Singapore at 7% (Business Times4)
Elite UK REIT – Reported DPU of 0.76 pence for Q1 2025, up 9.6% year-on-year. Distributable income increased 10.2% to £4.8 million, while net property income grew 24.4% to £10.4 million. Portfolio occupancy improved to 93.5% compared to 92.3% a year earlier (Yahoo News10)
Stoneweg European REIT – Q1 DPU fell 3.7% year-on-year to 3.374 euro cents despite net property income growing 2.4% to 33.5 million euros. Gross revenue came in 0.5% higher at $53.6 million (The Edge Singapore12)
Alexandria Real Estate – Reduced full-year 2025 adjusted FFO forecast to between $9.16 and $9.36 per share, down from previous range of $9.23 to $9.43 per share, citing anticipated lower leasing activity. Reported first-quarter FFO of $2.30 per share, compared with $2.25 per share a year ago (Reuters5)
Kimco Realty – Lifted full-year funds from operations forecast to between $1.71 and $1.74 per share, compared with prior target of $1.70 to $1.72. First-quarter funds from operations came in at 44 cents, compared with 39 cents a year ago, while revenue from rental properties rose 6.5% to $531.3 million (Reuters6)
First Sponsor – Reported decline in European property portfolio operating income to 7.8 million euros in Q1 2025, from 7.9 million euros a year earlier. Chinese hotel portfolio saw revenue fall 14% to 15.6 million yuan from 18.1 million yuan due to challenging economic conditions leading to lower occupancy rates (Business Times7)

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