Singapore office Reits deliver robust H1 performance on strong occupancy and higher rents
SINGAPORE’S real estate investment trusts (S-Reits) with meaningful office exposure delivered a robust showing for the first half as operating performance remained strong, even as borrowing costs declined.
Suntec Reit , Keppel Reit and OUE Reit , which hold exposure to Singapore CBD assets, reported strong growth in distributable income (DI) in their latest reporting period ended June.
Tight physical supply in core business districts, flight to quality and footprint expansion from global artificial intelligence players provided support for occupancy rates and positive rental reversions in key portfolio holdings.
Knight Frank noted in its Q2 2026 report that overall occupancy in the Central Business District was 95.3 per cent, with the persistently high occupancy highlighting the enduring appeal of the CBD for office tenants.
H1 leasing momentum was renewal-led
Leasing momentum in H1 2026 was predominantly renewal-led, as occupiers weighed high capital expenditure costs against relocation. Even as churn remained low, Knight Frank noted that AI-related firms were also reported to be setting up office or expanding in Singapore.
Keppel Reit delivered strong double-digit growth, with net property income (NPI) increasing 13.1 per cent year on year to S$122.5 million, and DI from operations surging 25.2 per cent to S$119.6 million.
This was driven by improved performance from the existing portfolio, an acquisition, and higher share of joint ventures from the acquisition of an additional one-third interest in MBFC Tower 3.
However, distribution per unit (DPU) slipped 4 per cent year on year due to the enlarged unit base.
Keppel Reit recorded a portfolio-wide rental reversion of 12.8 per cent. Weighted average signing rents for its Singapore CBD portfolio in the first half was S$13.14 psf a month; expiring leases in FY26 had an average rent of S$12.24 psf a month.
Similarly, Suntec Reit demonstrated a strong performance, with distributable income rising 25.5 per cent year on year to S$116.5 million for H1 FY26, pushing DPU up 24.8 per cent.
The robust showing was driven by stronger operational performance of the Singapore office and retail portfolio, lower financing costs, as well as lower Australia withholding tax provision.
The Reit hit an overall committed occupancy of 99.5 per cent among its Singapore office assets, and positive rental reversion of 10.1 per cent. Suntec Reit’s manager noted that portfolio occupancy is expected to remain high, with full year rental-reversion expected to be near 5 per cent.
OUE Reit reported a 28.6 per cent increase in DPU to 1.26 Singapore cents for H1 2026, driven by a similar jump in distributable income and anchored by stronger hospitality performance, the income contribution from the acquisition of Salesforce Tower and significantly lower interest expenses.
Positive rental reversion stood at 4.7 per cent for office lease renewals in the second quarter of 2026. The manager noted that tightening office supply in the CBD gives OUE Reit a favourable window to rejuvenate its tenant portfolio, and that it is carrying out a planned repositioning for OUE Downtown.
While CBD performance remained robust, ongoing supply tightness may also benefit other office assets as companies consider decentralised options.
Mapletree Pan Asia Commercial Trust , which holds office assets mainly in the HarbourFront and Alexandra precincts, said its Singapore portfolio remained resilient. Mapletree Business City (MBC) recorded a committed occupancy of 94.3 per cent, with a positive rental reversion of 0.8 per cent.
Market dynamics for H2 and 2027
Knight Frank noted the market dynamics of the first six months of the year is expected to prevail in the remaining half, and likely into 2027.
It added that rents are projected to increase by 3 to 5 per cent in 2026 given the tight CBD supply, with decentralised spaces capturing spillover demand when CBD occupiers require lower cost options to accommodate growth.
DBS Group Research noted that their preference continues to be office and industrial Reits with positive rental reversions, strong balance sheets and visible organic growth.
This includes CapitaLand Integrated Commercial Trust (CICT), Keppel Reit and CapitaLand Ascendas Reit . CICT is scheduled to announce its first half results on Aug 12. 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
