REIT listings may boost Singapore IPO market in 2025

A central bank plan to cut listing costs could enhance the city-state’s market appeal.

Singapore may experience increased listing activity next year after a slow 2024, with real estate investment trusts (REIT) driving the growth, analysts said.

Expected REIT listings in Singapore include Praemia REIM France and Japan’s Nippon Telegraph & Telephone Corp., which is weighing plans for a late-2025 debut of its global data centre REIT.

“There seems to be a renewed focus on REITs in Singapore,” Darren Ng, a transaction accounting support partner at Deloitte Singapore, said in an initial public offering (IPO) report for Southeast Asia. “As global interest rates stabilise, investor appetite for income-generating assets like REITs is expected to strengthen.”

The impact of interest rates is evident from the iEdge S-REIT Index's 1.7% rise on 19 September, after a 50 basis-point policy rate cut by the US Federal Reserve. Analysts expect three rate cuts from the US central bank next year.

S-REITs could benefit if these cuts play out, according to brokerage CGS International Securities Pte. Ltd.

Danny Wan, head of Strategy for Asia-Pacific at Capco, cited “a significant uptick” in REIT listings in Singapore. There were 40 listed REITs and property trusts in Singapore as of August 2024, according to the REIT Association of Singapore.

S-REITs account for 12% of the Singapore Exchange’s market capitalisation, with a market cap that has grown 6% annually in the past decade.

Wan said a plan by the Monetary Authority of Singapore to cut listing costs could boost the city-state’s market appeal.

“Together with the initiatives intended to drive activities and buzz, we look forward to continued relevance, enhancements and added vibrancy to Singapore’s equities market,” said Chan Yew Kiang, IPO leader for ASEAN and Singapore at Ernst & Young.

Apart from REITs, Singapore’s IPO market has significant mid- and large-cap stocks from the property and manufacturing sectors, he pointed out.

Wan said consumer goods, healthcare, and technology would continue to be bright spots. SCI Ecommerce Pte. Ltd., which spans the tech and consumer goods sectors, is set for a mid-2025 listing on the Singapore bourse.

Wan expects Singapore to keep its status as a hub for ASEAN (Association of Southeast Asian Nations) markets and economies after being the worst-performing Southeast Asian market in the first half of 2024, with just one mainboard listing from the Singapore Institute of Advanced Medicine Holdings Pte. Ltd.

The listing boosted Singapore's IPO market capitalisation to $231.8m in the first half of 2024 from $136.6m a year earlier, according to CSA Global TS.

Wan is keeping a positive outlook for 2025, forecasting higher market activity and listings amid expected interest rate cuts from many central banks. “Stability in macroeconomic and geopolitical environments will increase market confidence,” he said.

Chan said he expects increased IPO activity next year as interest rates ease and companies prepare for regional growth.