President Trump has rolled out a list of tariffs on more than 180 countries as he seeks to bring countries to the negotiating table.
Although he announced a 90-day pause on most of these reciprocal tariffs, China was hit even harder with a higher tariff rate of 125%.
With a potential trade war brewing, the REIT sector was not spared as investors remained pessimistic about the asset class.
Income investors, however, should look for REITs with strong sponsors and a portfolio of high-quality properties that can help them weather any storm.
Here are four Singapore REITs that can withstand a trade war.
OUE REIT (SGX: TS0U)
OUE REIT is a retail, commercial, and hospitality REIT with a portfolio of six assets in Singapore.
The REIT owns three office assets – OUE Bayfront, One Raffles Place and OUE Downtown, two hospitality assets – Hilton Singapore Orchard and Crowne Plaza Changi Airport, and the Mandarin Gallery, a high-end retail mall.
The total assets under management (AUM) stood at S$5.8 billion as of 31 December 2024.
OUE REIT has a strong sponsor in OUE Limited (SGX: LJ3), a property and healthcare group with a real estate portfolio worth S$9.3 billion and funds under management of S$7.9 billion as of 31 December 2024.
The REIT delivered a resilient performance for 2024 with revenue inching up 3.7% year on year to S$295.5 million.
Net property income (NPI) dipped slightly to S$234 million.
Distribution per unit (DPU) fell 1.4% year on year to S$0.0206.
OUE REIT also reported healthy operating numbers across its business divisions.
For the office segment, committed occupancy stood high at 94.6% and the division reported a robust positive rental reversion of 10.7% for 2024.
The hospitality segment enjoyed an 8.9% year-on-year increase in revenue for 2024 with revenue per available room (RevPAR) also rising 9.2% year on year.
Mandarin Gallery boasted a high occupancy of 98.2% and achieved a positive rental reversion of close to 20%.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT, or PLife REIT, is a healthcare REIT with a diversified portfolio of 75 properties – three hospitals in Singapore, 60 nursing homes in Japan, and 11 nursing homes in France.
The REIT’s total AUM stood at around S$2.46 billion as of 31 December 2024.
With healthcare being an essential need, PLife REIT should be relatively insulated from Trump’s tariffs and a trade war.
The healthcare REIT also has an excellent track record of rising DPU, posting 17 consecutive years of increasing core DPU since its IPO in 2007.
PLife REIT is supported by a strong sponsor in IHH Healthcare Berhad (SGX: Q0F), a healthcare giant running over 80 hospitals in 10 countries.
The REIT reported a mixed set of earnings for 2024 which saw gross revenue and NPI impacted by the weak Japanese Yen, registering a small year-on-year dip.
However, DPU managed to climb 1% year on year to S$0.1492.
The healthcare REIT has a healthy gearing ratio of 34.8% with a low cost of debt of just 1.48%.
There is no need to refinance any debt until September 2026.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of nine retail malls and an office building, all located in Singapore.
The REIT’s total AUM stood at S$7.1 billion as of 31 December 2024.
Being a suburban retail mall owner has its advantages as these malls serve mainly the heartland (i.e. HDB) populace and should see resilient footfall and tenant sales even during tough times.
FCT saw its fiscal 2024 (FY2024) gross revenue and NPI dip by 4.9% and 4.6% year on year, respectively, because of an asset enhancement initiative (AEI) at Tampines 1 Mall and the divestment of Changi City Point.
Excluding these effects, revenue and NPI would have been higher by 3.5% and 3.4%, respectively.
DPU for FY2024 stood at S$0.12042, registering a small 0.9% year-on-year decline.
The retail REIT recently announced the acquisition of Northpoint City South Wing for S$1.17 billion which will be DPU-accretive.
FCT is also proceeding with its Hougang Mall AEI which is projected to deliver a return on investment of around 7%.
Starhill Global REIT (SGX: P40U)
Starhill Global REIT, or SGREIT, is a retail and office REIT with a portfolio of nine properties in Singapore, Australia, Malaysia, Japan, and China.
This portfolio was valued at around S$2.8 billion as of 31 December 2024.
The REIT is backed by YTL Corporation Berhad (KLSE: 4677) as a sponsor, an integrated infrastructure developer with total assets of RM 89.9 billion as of 31 December 2024.
SGREIT delivered a resilient set of results for the first half of fiscal 2025 (1H FY2025) ending 31 December 2024.
Gross revenue inched up 1.7% year on year to S$96.3 million while NPI crept up 1.6% year on year to S$75.6 million.
DPU rose 1.1% year on year to S$0.018.
SGREIT has good income visibility with slightly more than half of its leases having periodic rent reviews.
Also, committed portfolio occupancy stood high at 97.7% as of 31 December 2024.
The REIT’s gearing remained reasonable at 36.2% and 83% of its debt was hedged to fixed rates, suggesting that the retail and commercial REIT should be well-protected against elevated interest rates.
SGREIT is also constantly refreshing the tenant mix at its malls and is carrying out an AEI for Wisma Atria to help boost rental growth.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
