4 Singapore REITs To Buy Before the Next Rate Cut

Core Viewpoint - Singapore REITs have faced challenges due to high financing costs and investor sentiment but are expected to recover as interest rates decline, making it a favorable time to consider quality REITs [1][14]. Group 1: Market Overview - Singapore REITs have been under pressure for the past two years due to high interest rates and dampened investor sentiment [1]. - The outlook is likely to improve with anticipated interest rate cuts, which typically boost distributions and support asset values [1][14]. Group 2: Individual REIT Analysis - Mapletree Pan Asia Commercial Trust (MPACT): - Owns properties across multiple countries and reported a DPU of S$0.0201 for 2QFY2025/2026, up 1.5% YoY [3]. - Committed occupancy fell to 88.9% from 96.4% YoY, with NPI down 2.2% YoY to S$163.9 million [4]. - VivoCity achieved 100% commitment and 14.1% rental reversion [4][5]. - Mapletree Industrial Trust (MIT): - Manages S$8.5 billion in assets and reported a DPU of S$0.0318 for 2QFY2025/2026, down 5.6% YoY [6]. - Occupancy rate was 91.3%, with a weighted average rental reversion of 6.2% for its Singapore portfolio [6][7]. - Average borrowing cost declined to 3.0%, with data center demand as a long-term growth driver [7]. - AIMS APAC REIT (AA REIT): - Reported a DPU of S$0.0472 for 1HFY2026, up 1.1% YoY, with portfolio occupancy at 93.3% [9]. - Achieved positive rental reversions of 7.7% in 1HFY2026 and has stable income from essential industries [10]. - CapitaLand Ascendas REIT (CLAR): - DPU dipped 0.6% YoY to S$0.07477 in 1H2025, with aggregate leverage rising to 39.8% by September 2025 [11][12]. - Achieved rental reversions of 7.6% for renewed leases in 3Q2025, supported by a strong sponsor [12][13]. Group 3: Investment Outlook - Lower interest expenses are expected to boost distributable income and attract investors back to REITs [14]. - REITs with strong sponsors and quality assets are likely to lead the recovery as interest rates decline [16]. - MPACT, MIT, CLAR, and AA REIT are highlighted as potential beneficiaries of the anticipated rate cuts [16].