- Healthcare REITs offer defensive stability with long-term leases and steady rental income, making them resilient in market downturns.
- Parkway Life REIT leads the sector with a strong portfolio across Singapore, Japan and Europe, consistently delivering growth.
- First REIT is expanding strategically, diversifying into Japan while reviewing potential asset restructuring in Indonesia.
Singapore’s healthcare real estate investment trusts (S-REITs) offer investors a stable and defensive option, backed by strong fundamentals and long-term demand for healthcare services. Despite market volatility, healthcare REITs have consistently delivered stable returns, driven by the resilience of healthcare assets, aging demographics, and the rising demand for private healthcare in the region.
Why Healthcare REITs?
Healthcare REITs provide exposure to essential medical properties, such as hospitals and nursing homes, which benefit from long-term leases and steady rental income. These assets tend to be less affected by economic cycles, making healthcare REITs a defensive play, especially in uncertain market conditions.
Singapore-listed healthcare REITs have demonstrated resilience despite a prolonged period of higher interest rates. In 2024, healthcare S-REITs recorded an average total return of 6.9%, following 7.1% in 2023. Year-to-date, they have continued to perform well, offering investors a combination of stability and growth potential.
Key Healthcare S-REITs on SGX
Parkway Life REIT: The Leader in Healthcare REITs
Parkway Life REIT (SGX: C2PU) is one of Asia’s largest healthcare REITs, owning 75 properties across Singapore, Malaysia, Japan, and France. It boasts a portfolio of key Singapore hospitals such as Mount Elizabeth, Gleneagles, and Parkway East. Despite currency fluctuations affecting revenue, its FY2024 distribution per unit (DPU) grew by 1% to S$0.1492, marking 17 consecutive years of DPU growth.
Recently, Parkway Life REIT expanded into Europe with the acquisition of 11 nursing home properties in France, further diversifying its portfolio while maintaining a strong presence in Singapore.
First REIT: Diversification Across Asia
First REIT (SGX: AW9U) owns 32 healthcare properties valued at S$1.12 billion, spanning Indonesia, Singapore, and Japan. Its portfolio includes 15 hospitals in Indonesia, three nursing homes in Singapore, and 14 nursing homes in Japan.
Despite a 5.9% decline in FY2024 rental income due to currency headwinds, First REIT continues to maintain 100% occupancy rates and sustainable lease structures. Its strategic expansion into Japan, where its portfolio now makes up over 22% of its assets, highlights its growth ambitions. Additionally, it is reviewing a non-binding letter of intent (LOI) from Siloam International Hospitals to acquire its Indonesian hospitals, which could further reshape its asset base.
The Outlook for Healthcare REITs
The long-term demand for private healthcare services, an aging population, and growing medical tourism in Southeast Asia support the continued growth of healthcare REITs. Analysts expect demand for defensive healthcare assets to rise, particularly amid geopolitical uncertainty and market volatility.
With long lease tenors and strong cash flow visibility, healthcare REITs remain an attractive choice for investors seeking stability, income, and defensive growth potential.
Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.
