S-Reits record net institutional inflows in March as sector snaps 5-month losing streak

[SINGAPORE] Global markets experienced a sell-off after US President Donald Trump imposed a 10 per cent baseline tariff on imported goods from all countries starting Apr 5. US markets reacted sharply, with the S&P 500, Dow and Nasdaq indices dropping 4.8 per cent, 4 per cent and 6 per cent, respectively in the Apr 3 session.

Following that, on Apr 4, the Straits Times Index (STI) dipped close to 2 per cent in the morning session as about S$1.6 billion worth of shares changed hands. The STI closed the week with a 3.7 per cent decline, after five consecutive sessions of losses.

In contrast, Singapore real estate investment trusts (S-Reits), as tracked by the iEdge S-Reit Index, rose 1.4 per cent on Apr 3 following Trump’s tariff announcement, and ended the week in positive territory, up 0.2 per cent.

S-Reits outperformed the global Reit market, with the FTSE Epra Nareit Global Reits Index declining more than 3 per cent in the Apr 3 session. The FTSE Epra Nareit Asia Pacific and FTSE Epra Nareit Asia ex Japan indices underperformed S-Reits, at 0.2 per cent and 0.9 per cent, respectively.

Institutional investors were seen to have rotated into S-Reits, with about S$26 million of net inflows during the Apr 3 session, possible indicating a preference for relative stability and income potential amid a volatile market.

S-Reits ended the first quarter of this year with total returns of 2.8 per cent, driven by a 5 per cent price gain in March, marking its best monthly return in eight months.

Within the iEdge S-Reit Index, 23 trusts were gainers, two remained unchanged, and five were decliners during March. The top S-Reit performers for the month were Frasers Hospitality Trust, Frasers Logistics and Commercial Trust, ParkwayLife Reit, Keppel Reit, and CapitaLand Integrated Commercial Trust.

ParkwayLife Reit and CapitaLand Integrated Commercial Trust were also among the top five performers on Apr 3, with gains of 5.2 per cent and 3.3 per cent respectively.

Conversely, the underperformers in March were Digital Core Reit, Keppel Pacific Oak US Reit, Sasseur Reit, Manulife US Reit, and Daiwa House Logistics Trust.

In March, Franklin Resources – one of the world’s largest investment managers, also known as Franklin Templeton – emerged as a substantial shareholder of Digital Core Reit, with a 5.06 per cent interest. The 969,800 units were acquired at an average price of US$0.577 apiece.

In terms of fund flows, institutional investors net bought more than S$71 million into the sector during March, after five consecutive months of net institutional outflows since last September.

The five S-Reits which had the largest net institutional inflows in March were CapitaLand Integrated Commercial Trust, Mapletree Logistics Trust, Paragon Reit, Keppel Reit and ParkwayLife Reit.

DBS Research noted that geopolitics and economic tariffs remain a key overhang, which could further escalate global trade tensions and add to inflationary pressures. However, the house sees a risk-off shift towards defensive names, which could benefit Reits in the process.

DBS Research continues to prefer the Singapore retail and industrial sub-segments. The market consensus for two rate cuts for the rest of 2025 also remains unchanged.

The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the S-Reits & Property Trusts Chartbook.