Things might get ugly.

The Fed has finally hiked rates. Higher interest rates ought to have sent Singapore REITs down to record low levels - but it didn’t happen.

Instead, more people were buying Singapore REITs in a big way. Out of the top 20 stocks that recorded the highest net retail buying, net retail investors bought ~S$1.06 billion worth of Singapore REITs (see YTD NRF S$M column).

Credit: Singapore Exchange

Many investors fall into the same trap here today. They become overly optimistic when they feel the market is overextended and overly pessimistic during a correction. Singapore REITs have fallen recently, but not close to its 2023 and 2025 levels.

What you want to do with Singapore REITs today is avoid large stock purchases and “go all in”.

Because no one can predict interest rates.

This morning, I sent my usual monthly coaching invitation to premium Diligence Wealth Club members. While I said I wasn’t surprised with this week’s Fed rate hike, what I didn’t expect this time was all 12 voting members of the Federal Open Market Committee were in favour of raising rates.

Previously, in the April 2026 meeting, the Fed committee saw a massive internal division where only four governors dissented in favor of tighter policy. This marked the highest number of dissents at a single meeting since 1992.

Now this sudden shift in a unanimous vote made me sit up.

First, let’s recall what the Federal Reserve does. It controls short-term interest rates, or the Fed Funds Rate by buying and selling government securities. This influences how lenders and borrowers make decisions. When rates go up, lenders charge more for lending money. When rates go up, borrowers think twice about borrowing more money. This means it’s harder and more expensive to get a loan.

People will say the Fed is “tight”.

Today, the Fed is trying to slow down access to capital - persistent inflation of higher energy prices coming from Middle East war, a much higher government borrowing and fears of a massive AI capital spending that’s not going to end anytime soon.

But what ultimately the Fed wants to tame is the inflation due to the strength of the US economy and consumer spending.

In fact, the Fed has suggested there could be another rate hike toward the end of 2026. Like one analyst I read pointed out:

In 2023, I wrote to my readers and members about the compelling value in Singapore REITs. In 2024, I shared that it was still a great time to accumulate Singapore REITs during ShareInvestor’s REIT Symposium event (see photo taken below). Back then, there was a huge misunderstanding between the quality of Singapore REIT assets and the stock prices they were trading at - that was the buy signal.

However, in today’s change in interest rate cycle, the point of extreme pessimism isn’t here yet. This is because when interest rates continue to climb, share prices of Singapore REITs will get hit. The thing is, if we look at past cycles, Singapore REIT shares and DPU tend to perform better if interest rates remain stable or are dropping.

I’ve said in my Diligence Monthly Research Report March 2026:

Credit: Diligence Research Report March 2026

More importantly, make sure we continue to do our own due diligence. For instance my writer, KC has broken down 3 Singapore's "pure-play" data centre REITs. That's good research.

There are still that perfect opportunity to buy high-quality Singapore REITs today. But I’m very selective.

Willie Keng, CFA

Founder, DividendTitan.com