Can logistics and data centres sustain industrial REIT growth?

S-REITs make up around 10% of SGX total market capitalisation.

Singapore’s industrial REITs remain appealing to investors despite global uncertainties and trade tensions, even as rising supply puts pressure on rental growth in 2025.

Demand for logistics assets and data centres continues to be robust, driven by e-commerce expansion, digitalisation, and AI adoption, according to a report by investment platform Syfe.

“S-REITs play a key role in Singapore’s capital market, accounting for around 10% of the Singapore Exchange’s total market capitalisation. More than 90% of S-REITs own assets outside Singapore, offering investors diversified exposure across Asia Pacific, South Asia, Europe, and the US,” Syfe said.

A separate report by DBS said Singapore’s industrial property market continues to outperform expectations, demonstrating resilient demand, sustained rental growth, and stabilising occupancy across warehouses, factories, and business parks, despite elevated new supply.

The multi-user and warehouse segments remain star performers, whilst business parks are rebounding, backed by high pre-commitments and rising rents. DBS said the overall improvement in the quality and offerings of industrial stock is expected to be a key driver, with the bank forecasting 6%–7% rental growth next year.

DBS also said that positive rental reversions, improving financing costs, and sustained net property income (NPI) growth are placing industrial S-REITs on a firmer footing, with earnings compound annual growth rate projected at about 1.3% over the next two years, compared to around 0.5% growth in FY2025.

Active capital recycling and the resumption of equity fundraising are enabling REITs to pivot towards higher-quality assets, supporting earnings stability even amid new supply and global uncertainties that continue to weigh on near-term sentiment.

DBS noted that a majority of the sector’s $3b acquisition pipeline is expected to complete only in H2 2025, implying that more meaningful earnings uplift will materialise in FY2026.

Amongst individual names, DBS said CapitaLand Ascendas REIT stands out, with strong operational execution and $1.3b in accretive acquisitions set to accelerate earnings.

Mapletree Logistics Trust is also stabilising, as China headwinds ease and new assets ramp up. Meanwhile, among data centre REITs, NTT DC REIT stands out with attractive valuations, a projected earnings CAGR of around 5%, and embedded pipeline catalysts, positioning it as a potential outperformer heading into FY26.