{"id":226942,"date":"2025-07-08T11:00:00","date_gmt":"2025-07-08T15:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=226942"},"modified":"2025-07-09T03:40:51","modified_gmt":"2025-07-09T07:40:51","slug":"reit-watch-10-s-reits-lowest-gearing-ratios-average-335","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/etfs\/reit-watch-10-s-reits-lowest-gearing-ratios-average-335\/","title":{"rendered":"REIT Watch – 10 S-REITs with lowest gearing ratios average 33.5% as investors await rate cuts"},"content":{"rendered":"\n

10 S-REITs with lowest gearing ratios<\/strong><\/h2>\n\n\n\n
Trust Name<\/strong><\/td>Stock Code<\/strong><\/td>Market Cap S$M<\/strong><\/td>Gearing Ratio<\/strong><\/td>Dividend Yield<\/strong><\/td>PB Ratio<\/strong><\/td><\/tr>
Sasseur Real Estate Investment Trust<\/td>CRPU<\/td>816<\/td>25.9<\/td>9.7<\/td>0.78<\/td><\/tr>
AIMS APAC REIT<\/td>O5RU<\/td>1,094<\/td>28.9<\/td>7.4<\/td>1.08<\/td><\/tr>
Keppel DC REIT<\/td>AJBU<\/td>5,235<\/td>30.2<\/td>4.5<\/td>1.49<\/td><\/tr>
Far East Hospitality Trust<\/td>Q5T<\/td>1,152<\/td>31.2<\/td>7.3<\/td>0.62<\/td><\/tr>
Frasers Hospitality Trust<\/td>ACV<\/td>1,348<\/td>34.8<\/td>3.2<\/td>1.09<\/td><\/tr>
Frasers Logistics & Commercial Trust<\/td>BUOU<\/td>3,261<\/td>36.1<\/td>7.9<\/td>0.80<\/td><\/tr>
Parkway Life REIT<\/td>C2PU<\/td>2,688<\/td>36.1<\/td>3.7<\/td>1.70<\/td><\/tr>
Starhill Global REIT<\/td>P40U<\/td>1,183<\/td>36.6<\/td>7.2<\/td>0.68<\/td><\/tr>
IREIT Global<\/td>UD1U<\/td>383<\/td>37.7<\/td>6.0<\/td>0.48<\/td><\/tr>
Mapletree Pan Asia Commercial Trust<\/td>N2IU<\/td>6,747<\/td>37.7<\/td>6.8<\/td>0.71<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Source: SGX, Bloomberg (Data as of 3 Jul 2025). Distribution yields are extracted from <\/em>SREITs & Property Trusts Chartbook \u2013 2Q 2025<\/em><\/a>.<\/em><\/p>\n\n\n\n

Last month, the US Federal Reserve opted to maintain its benchmark interest rate, adopting a cautious stance despite speculation about a potential rate cut as early as July, with Fed Chair Jerome Powell stating that future decisions will be data-dependent.<\/p>\n\n\n\n

Market analysts now predict a 75 basis points cut in 2025, up from the previously anticipated 50 basis points.<\/p>\n\n\n\n

S-REITs have shown commendable performance, closing the first half of 2025, with a 4.2 per cent total return, as indicated by the iEdge S-REIT Index. Over the past 12 months, S-REITs have delivered a 10.5 per cent total return.<\/p>\n\n\n\n

Notably, the top 10 best performing S-REITs have delivered double digit returns in the first half of 2025, including Frasers Hospitality Trust (21.5 per cent), CapitaLand Integrated Commercial Trust (14.3 per cent), Frasers Centrepoint Trust (11.4 per cent), CapitaLand Ascendas REIT (10.1 per cent), and ParkwayLife REIT (10.0 per cent).<\/p>\n\n\n\n

The iEdge S-REIT Index concluded the first half of 2025 at 1,021 and touched 1,030 on July 3, a level which was previously tested three times in November 2024, January 2025 and April 2025. The consensus estimate target price for the next 12 months is pegged at 1,159.<\/p>\n\n\n\n

From a balance sheet standpoint, the S-REITs sector maintains an average gearing ratio of 40 per cent, reflecting prudent capital management, that is well below the regulatory limit of 50 per cent.<\/p>\n\n\n\n

The 10 S-REITs with lowest gearing ratios are Sasseur REIT, AIMS APAC REIT, Keppel DC REIT, Far East Hospitality Trust, Frasers Hospitality Trust, Frasers Logistics & Commercial Trust, ParkwayLife REIT, Starhill Global REIT, IREIT Global and Mapletree Pan Asia Commercial Trust.<\/p>\n\n\n\n

On average, these 10 have a gearing ratio of 33.5 per cent.<\/p>\n\n\n\n

Sasseur REIT, notable for its low gearing ratio of 25.9 per cent for 1Q25, reported a slight year-on-year dip of 0.2 per cent in its 1Q25 EMA rental income. This was primarily due to weaker forex and lower variable income. However, in RMB terms, 1Q25 EMA rental income saw a 1.6 per cent year-on-year increase.<\/p>\n\n\n\n

The REIT\u2019s portfolio occupancy rate improved to 98.9 per cent, up from 97.9 per cent the previous year, with higher occupancy recorded at Chongqing Bishan and Kunming outlets. Management remains committed to maintaining a healthy balance sheet to seize potential opportunistic acquisitions.<\/p>\n\n\n\n

Sasseur REIT has rights-of-first-refusal (ROFR) for two assets in Xi\u2019an and Guiyang and could also look for acquisition opportunities within other assets managed by its sponsor. As at 1Q25, its sponsor, Sasseur Group, manages a total of 18 outlet malls including the four properties owned by the Group.<\/p>\n\n\n\n

UOB Kay Hian research has noted that the recent preference for quality names has resulted in the 3-month compounded SORA easing by 98 basis points to 2.09 per cent in the first half of 2025. Despite this significant drop, there has been no positive price movement or re-rating for S-REITs. The research house expects broader recovery in liquidity from possible Fed rate cuts at the end of 2025 to lift the sector.<\/p>\n\n\n\n

However, global geopolitical uncertainties and tariff risks remain in focus and investors should stay nimble and watch data going into 2H25.<\/p>\n\n\n\n

For more research and information on Singapore\u2019s REIT sector, visit <\/strong><\/em>sgx.com\/research-education\/sectors<\/strong><\/em><\/a> for the SREITs & Property Trusts Chartbook.<\/strong><\/em><\/p>\n\n\n\n

REIT Watch is a regular column on The Business Times, <\/strong><\/em>read<\/strong><\/em><\/a> <\/strong><\/em><\/a>the original version.<\/strong><\/em><\/p>\n\n\n\n

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