Shifting interest rate expectations suggest tailwinds for S-Reits

SINGAPORE-LISTED real estate investment trusts (S-Reits) are back on the radar of market watchers after a dismal showing last year. A tapering of aggressive rate hikes should support prices this year, although analysts warn it could still be a bumpy ride ahead for investors in the asset class.

The iEdge S-Reit Index has returned a total of 3 per cent in the year to Mar 23. In comparison, the benchmark Straits Times Index (STI) generated total returns of -0.4 per cent over the same period.

This is a marked difference from last year, when interest rate fears triggered one of the worst sell-offs in the 20-year history of S-Reits. The S-Reits recorded total returns of -11.9 per cent in 2022, whereas the STI had total returns of 8.4 per cent.