S-REITs a good defensive play on renewed US-China tensions

They have stable cash flows and will benefit from upcoming rate cuts.

Investors should consider “defensive and laggard S-REIT” stocks as they provide income stability in the highly uncertain macro environment triggered by the US-China trade conflict.

Singapore REITS (S-REITs) are noted to have stable cash flows due to the long tenure of their leases, which range from three to 10 years.

“S-REITs have largely lagged recovery in the broader market despite support
from lower domestic interest rates, which is puzzling. Thus, they are unlikely
to lead the decline during the ongoing correction,” said UOB Kay Hian (UOBKH) analyst Jonathan Koh.

Target price for CapitaLand Integrated Commercial Trust (CICT) is S$2.79; for Keppel DC REIT (KDCREIT) is S$2.69; for Parkway Life REIT (PREIT) is S$5.34; and for Lendlease Global Commercial REIT (LREIT) is S$0.79.

S-REITs also reportedly benefit from the recovery in liquidity triggered by upcoming rate cuts. The 10-year Singapore government bond yield has compressed, whilst yield spread for S-REITs have expanded year-to-date to 3.62%.

The advice comes following the US’ decision to impose an additional 100% tariff on all Chinese imports effective 1 November 2025. This follows after China’s newly expanded export controls on rare earth minerals.

The ongoing US government shutdown that began on 1 October, as well as massive layoffs of federal workers by the government during the shutdown, could disrupt essential services, increase unemployment, and undermine the economic stability of the US, noted UOB Kay Hian in a 13 October 2025 report.