S-Reits commence Q1 reporting season on a positive start

[SINGAPORE] The reporting season for Singapore real estate investment trusts (S-Reits) kicked off with Alpha Integrated Reit and Keppel DC Reit releasing their Q1 FY2026 business updates on Thursday (Apr 16).

This was followed by Kore US Reit’s business update the next day, with all three S-Reits highlighting improvements in operating or financial metrics.

A further 25 S-Reits have also confirmed that they will report their financial results or business updates between Apr 21 and May 13. Among them, four will report full-year financial results, two will report first-half financial results, and another 19 will provide quarterly business updates.

Alpha Integrated Reit delivered a steady operating performance in Q1 FY2026, supported by proactive lease management, with committed portfolio occupancy rising to 91.4 per cent as at Mar 2026, from 86.4 per cent a year earlier.

The Reit also recorded strong rental growth, with portfolio rental reversion of 12 per cent in Q1, with positive rental reversion across all asset clusters. Capital management metrics also improved, with all-in financing costs falling to 3.85 per cent from 4.57 per cent a year ago, while interest coverage ratio rose to four times, from 3.2 times over the same period.

Meanwhile, Keppel DC Reit posted stronger earnings in Q1 FY2026, with distribution per unit (DPU) rising 13.2 per cent, supported by higher gross revenue and a 19.4 per cent increase in net property income (NPI). This was driven by earnings contributions from the acquisition of Tokyo Data Centre 3, as well as strong portfolio performance.

The Reit’s portfolio occupancy was stable at 95.6 per cent, while it also recorded portfolio rental reversion of 51 per cent during the quarter.

Keppel DC Reit’s manager noted that the Reit has strong income visibility, underpinned by renewal of major contracts in 2024 and 2025, with only around 6 per cent of rental income up for renewal per annum in 2026 and 2027.

It also expects limited first-order impact from the ongoing Middle East conflict, given that net electricity costs account for less than 3 per cent of operating expenses, and are largely hedged through power procurement contracts until end-2026.

Elsewhere, Kore reported a 4.3 per cent improvement in income available for distribution, as gross revenue and NPI grew.

The Reit reported portfolio rental reversion of 0.8 per cent, while portfolio occupancy slipped slightly to 85.1 per cent due to a vacancy in its Westpark Portfolio, but the manager noted that negotiations were underway to backfill a portion of the space.

Kore’s manager observed that US office leasing activity has reached post-pandemic highs, and is projected to pick up further through 2026, supported by lease expiries and constrained new supply. It added that office led 2025 price growth across major asset classes, with rebounding transaction volumes and selective large deals – momentum that could extend into 2026.

S-Reits faced headwinds in Q1 2026, with the iEdge S-Reit Index falling 8 per cent amid investor concerns of stagflation following the Middle East conflict. However, the index has since rebounded 5.2 per cent in the second quarter to date.

Despite the macro uncertainty, analysts from DBS Group Research noted in an end-March report that S-Reits are coming from a position of relative strength, with largely stabilised balance sheets, a high proportion of fixed or hedged debt, and favourable refinancing dynamics.

The analysts added that the stagflationary background may curb sentiment and near-term re-rating, but they see limited broad earnings downside absent a sustained, material rise in Singdollar interest rates, and favour S-Reits with earnings visibility, strong tenant quality and embedded rental growth. SGX RESEARCH

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.