Executive Summary

As 2026 begins, the operating environment for Singapore REITs is showing signs of stabilisation. Interest rates have plateaued, financing pressures have eased, and expectations of a more supportive macro backdrop are gradually returning. Yet REIT price performance remains uneven, with sharp rallies in some counters and prolonged stagnation in others.

This article examines four Singapore-listed REITs through a portfolio construction lens: two that have recently attracted capital due to resilient fundamentals and income visibility, and two that warrant monitoring due to valuation gaps or improving long-term prospects. By analysing operating performance, balance sheet strength, and income sustainability, the article highlights how discipline and selectivity remain critical as the REIT recovery unfolds unevenly.

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An Uneven REIT Landscape in Early 2026

Despite improving macro conditions, the Singapore REIT market has not moved in a uniform manner. Financing costs have stabilised and refinancing risks have moderated, yet price responses have varied widely. Some REITs have rallied sharply following positive announcements, while others—despite strong asset quality—remain subdued.

This divergence reflects a market that is transitioning rather than fully recovering. In such an environment, valuation discipline and clarity around each REIT’s role within an income portfolio become increasingly important.

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Frasers Centrepoint Trust: Suburban Retail Stability Amid Sentiment Noise

Frasers Centrepoint Trust (FCT) (SGX: J69U) represents a case study in sentiment-driven volatility versus operational resilience. As a suburban retail REIT focused on heartland malls such as Northpoint City and Waterway Point, FCT derives the bulk of its income from essential, non-discretionary spending, including groceries, food and beverage, and services.

Recent investor concerns have resurfaced around the Johor Bahru–Singapore Rapid Transit System (RTS) Link, scheduled to commence operations by end-2026. The prevailing fear is that increased cross-border accessibility may divert spending away from northern suburban malls, particularly Causeway Point.

However, most analysts assessing the longer-term impact have maintained a measured stance. The development of the Woodlands Regional Centre, designated as Singapore’s Northern Gateway, is expected to significantly expand the local catchment population over the next decade. Projections indicate population growth of approximately 25–27%, potentially exceeding 250,000 residents over a 10–15 year horizon. This demographic expansion is expected to provide structural support for retail demand.

Operationally, FCT’s FY2025 performance remained steady. Portfolio occupancy dipped marginally to 98.1%, largely due to the exit of Cathay Cineplexes at Causeway Point and Century Square. Excluding this event, occupancy stood at approximately 99.9%. Re-tenanting efforts are underway, with the potential to enhance rental yields by subdividing large-format spaces.

With gearing at 39.6% and nearly 80% of debt hedged at fixed rates, FCT continues to demonstrate balance sheet resilience consistent with a core suburban retail REIT profile.

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United Hampshire US REIT: High-Yield Exposure as a Satellite Allocation

United Hampshire US REIT (UHREIT) (SGX: ODBU) occupies a markedly different position within the REIT spectrum. Focused on grocery-anchored retail and self-storage assets in the United States, the REIT derives income from tenants such as Walmart, Publix, and BJ’s Wholesale Club—retailers that tend to perform defensively across economic cycles.

Financial performance has shown improvement. For the first half of 2025, UHREIT reported a 4% year-on-year increase in distribution per unit (DPU) to 2.09 US cents. This was followed by a 15.5% year-on-year increase in distributable income in the third quarter of 2025, supported by new leases and lower interest costs as monetary conditions eased.

At a dividend yield exceeding 8%, UHREIT offers elevated income potential relative to larger, more established REITs. However, its smaller market capitalisation of approximately US$300 million and USD-denominated distributions introduce additional risks, including liquidity and currency exposure. These characteristics suggest suitability as a higher-yield satellite allocation rather than a core holding.

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Digital Core REIT: A Reset Priced Ahead of Cash Flow

Digital Core REIT (SGX: DCRU) has attracted significant market attention following the announcement of a 10-year lease agreement with an investment-grade global cloud service provider for its Virginia data centre. The agreement is expected to generate approximately US$13.3 million in annualised net property income for the REIT’s 90% stake, representing a 35% uplift over previous rental income.

Once the lease commences on 1 December 2026, portfolio occupancy is expected to rise from 81% to 98%, while weighted average lease expiry extends from 4.7 to 5.7 years. At recent trading levels, the REIT offers a dividend yield above 7% and trades at a material discount to net asset value.

However, the timing of cash flow remains a key consideration. The rental uplift will not be reflected in distributions until late 2026, while approximately US$40 million in capital expenditure is required for redevelopment. As a result, current prices incorporate expectations well ahead of realised income, raising questions around near-term risk-reward balance.

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Mapletree Industrial Trust: A Quality Laggard with Income Appeal

Mapletree Industrial Trust (MIT) (SGX: ME8U) represents a contrasting opportunity. Over the past year, its unit price has declined by approximately 5%, reflecting subdued sentiment rather than structural deterioration. First-half FY2026 results showed a 5.6% year-on-year decline in DPU, driven primarily by currency effects and higher borrowing costs incurred earlier in the rate cycle.

Despite this, MIT’s balance sheet remains strong. Gearing stands at 37.3%, interest coverage is robust at 3.9 times, and the REIT maintains a “BBB+” credit rating. Its portfolio includes a diversified mix of Singapore high-specification industrial assets alongside data centre exposure in Singapore, Japan, and the United States.

At current prices, MIT offers a dividend yield of approximately 6%, a level rarely seen among large, sponsor-backed industrial REITs. While challenges persist in parts of its US data centre portfolio, the overall asset quality and financial flexibility position MIT as a potential beneficiary if operating conditions continue to stabilise.

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Portfolio Construction Considerations

The four REITs examined highlight the importance of role clarity within an income-focused portfolio.

Frasers Centrepoint Trust provides defensive, domestic retail exposure anchored by non-discretionary spending. For United Hampshire US REIT, it offers elevated income potential, balanced against higher volatility and currency exposure. Digital Core REIT reflects a longer-dated recovery story, with valuation hinging on future cash flow realisation. And finally, Mapletree Industrial Trust presents a high-quality option trading at a valuation discount due to temporary headwinds.

Rather than signalling a broad-based recovery, current market conditions reward selective positioning based on fundamentals, balance sheet strength, and income visibility.

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Conclusion

Early 2026 presents a transitional phase for Singapore REITs. While macro pressures have eased, price performance continues to diverge sharply across the sector. In this environment, disciplined evaluation of fundamentals and portfolio role remains critical.

The REITs discussed illustrate how opportunities may arise both from temporary sentiment-driven dislocations and from longer-term structural improvements. As the recovery progresses unevenly, patience and selectivity are likely to remain essential for income-focused investors.

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