Singapore’s real estate investment trusts (Reits) have experienced a sharp decline in investor interest, primarily due to post-pandemic shocks like elevated interest rates and shifts toward remote work. Once outperforming the Straits Times Index (STI), these property trusts are now facing pressure to reform and regain their former appeal. Governance concerns, particularly the influence of sponsors—firms that manage and benefit from Reits—have prompted calls for greater regulatory intervention.

The case of Digital Core Reit, which struggled with disclosure issues following a key tenant’s bankruptcy, highlights the need for stricter transparency requirements from the Singapore Exchange. Similarly, Sabana Industrial Real Estate Investment Trust’s move to oust its external manager last year was a landmark victory for minority shareholders. However, the subsequent delays in restructuring due to legal ambiguities emphasize the need for clearer regulations.

Despite these challenges, S&P Global Ratings stress tests show Singapore’s Reits to be more resilient compared to their peers in other regions. To revive investor confidence, reforms aimed at reducing the dominance of sponsors and increasing the power of unitholders are essential. With activist investors leading the charge, regulators must step in to support these efforts and restore balance in the sector.