To The Moon

We're seeing a clear divergence to start the day. The US markets, which have been on an absolute tear, finally hit a wall overnight. The $NASDAQ 100(QQQ)$ closed in the red, and the $Straits Times Index(STI.SI)$ is feeling that cautious sentiment this morning.

The "risk-on" party, fueled by US-China trade optimism and hopes of a Fed rate cut, has taken a pause. This brings the focus right back home. If "explosive growth" (like US tech) is taking a breather, is it time for "stable yield" (like SG REITs) to shine?

Today, we get our most important test of that thesis.

What's Worth Noting: The Bellwether Reports

The single most important event for the Singapore market today is the Q3 business update from $CapitaLand Integrated Commercial Trust(C38U.SG), which was just released before the market opened.1

Why does this one report matter so much? Because CICT is the bellwether for the entire S-REIT sector. It's the largest REIT on the SGX and a proxy for the health of Singapore's core office and retail markets.2

The headline numbers are solid, as expected:

• Gross Revenue: Up 1.5% to S$403.9 million.3

• Net Property Income (NPI): Up 1.6% to S$294.4 million.4

• Portfolio Occupancy: A very strong 97.2%.5

This is good. It shows stability.6 But the headline numbers are not the trading opportunity.

The Opportunity: Digging Deeper into $CICT's Guidance

The real trade isn't the headline NPI; it's the forward-looking data. I'm looking at three key metrics from this report to decide my plan for the entire S-REIT sector.

• 1. The Office Story (The "Good News")

   

  CICT reported a positive rental reversion of +6.5% for its office portfolio.7 This is a very strong number. It confirms the "flight to quality" thesis: despite work-from-home trends, companies are paying more for premium, green-certified Grade A office space, which CICT owns. This is a bullish sign for the office segment.

• 2. The Retail Story (The "Even Better News")

   

  The retail portfolio is on fire. CICT reported a +7.8% positive rental reversion, with suburban malls jumping +8.4%.8 More importantly, shopper traffic and tenant sales are up significantly.9 This signals that consumer spending remains resilient and shoppers are back in the malls. This is a huge "all clear" for other retail-focused REITs.

• 3. The Debt Story (The Most Important News)

   

  This is the big one. The entire bull case for S-REITs rests on financing costs peaking. CICT's report shows:

• Aggregate Leverage: 39.2%. This is healthy and well below the 50% limit.10

• Cost of Debt: They recently issued S$300 million in 7-year notes at a fixed rate of just 2.25%.11 This is fantastic. It shows they are successfully locking in low borrowing costs before any potential rate volatility.12

• Interest Coverage: A very healthy 3.5x.

My Plan: How to Read Today's Action

Here is my bull vs. bear take based only on the important metrics from this CICT report.

My Take & Plan:

The $CICT(C38U.SG)$ report is a solid win for the S-REIT bull thesis.The US tech wobble shows that the "explosive growth" trade is vulnerable. In contrast, CICT just proved that the "stable yield" trade has a rock-solid foundation. They confirmed that premium office and retail demand is strong, and more importantly, they are managing their debt brilliantly by locking in low fixed rates.13

My Plan: I see the current market caution as an opportunity. The $CICT(C38U.SG)$ report gives me the green light to continue buying into the S-REIT sector on any weakness. I'm looking at other blue-chip REITs that are about to report, like $Mapletree Logistics Trust(M44U.SG)$ (reporting today after-market) and $CapitaLand Ascendas REIT(A17U.SG)$ (reporting Oct 31), as prime candidates to benefit from this same positive trend.

$FTSE ST REIT Index(ES3.SG)$ $Straits Times Index(STI.SI)$ $Mapletree Pan Asia Commercial Trust(N2IU.SG)$

$FTSE250 ETF(MIDD.UK)$ $Straits Times Index(STI.SI)$ $Mapletree PanAsia Com Tr(N2IU.SI)$ $S&P 500(.SPX)$ $NASDAQ(.IXIC)$ $Invesco QQQ(QQQ)$

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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