Why I'm Buying Beaten-Down Singapore REITs (S-REITs)

Many financial news sites and social medias say one thing about S-REITs. High interest rates have been crushing their profits and share prices. Price has been on a long downtrend since 2020, and many investors ran for the exits calling S-REITs uninvestible. Some people see risk but I see a once-in-a-few-years opportunity.

What is an S-REIT?

Singapore Real Estate Investment Trusts listed on the SGX provide investors with exposure to income-producing real estate, without the complexities of direct property ownership. Each REIT owns and manages their portfolio of real estate assets, and buying units of the REIT gives us a stake in this portfolio. Unitholders are like landlords collecting rental income without the headache of maintenance, finding tenants and other worries. 

REITs have been in a long bear market since 2020 caused by higher interest rates affecting the profitability of real estate investments. This has caused some people to shun REITs as an asset class, citing the large capital losses some investors would have incurred. To me, this presents an opportunity to add these undervalued assets into my portfolio.

Case Study: Mapletree Industrial Trust (MIT), a Falling Knife or Coiled Spring?

Lets look at an example of a REIT whose price has declined significantly, Mapletree Industrial Trust. The unit price peaked above 3.30 in 2020, and the price has been beaten down to 1.93 as of the latest market closing price on 6 June 2025. This represents an almost 40% decline in price. But price is just half the story.

Price vs Payout, Data Does Not Lie

Lets have a look at the distribution history of MIT, taken from https://www.mapletreeindustrialtrust.com/Investor-Relations/Distribution/Distribution-History.aspx

  • 2016/2017: 11.39 cents
  • 2017/2018: 11.75 cents
  • 2018/2019: 12.16 cents
  • 2019/2020: 12.24 cents
  • 2020/2021: 12.55 cents
  • 2021/2022: 13.80 cents
  • 2022/2023: 13.57 cents
  • 2023/2024: 13.43 cents
  • 2024/2025: 13.57 cents

    • The distribution history tells a very different story from the observed price volatility. The actual cash paid to investors has remained remarkably stable and is even recovering as we go into 2025. The market might be panicking about prices, but the underlying rental income is remarkably robust.

    My S-REIT Strategy for 2025

    We want to buy stuff that yields good value for money. Financial metrics like P/B and dividend yields provide an objective method for me to value REITs. These basic datas are readily available from brokerage apps. They give us an avenue to look past the noise of gloomy prices, and find good undervalued dividend stocks. 

    I hold blue-chip REITs from strong, well-known companies like Capitaland, Mapletree and Frasers. I also give myself broad exposure to multiple sectors and regions through ETFs. The CFA REIT ETF is one such fund that can even be bought using CPF. 

    At current prices, many of these blue-chip REITs offer dividend yields between 5-7%. That's getting paid to wait for the market sentiment to turn.

    Disclaimer: This blog post is for entertainment purposes only and does not constitute financial advice. Please do your own due diligence.

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