Among the fundamental concerns for S-REITs' business ahead, Chong cites slowing tourist arrival growth, especially from China. "A prolonged decline could hurt occupancies at hotels and also sales/ shopper traffic at the retail malls," he said.
He's also concerned about the city-state's labor shortage. "The labor crunch from the tighter foreign labor quota policy could continue to impact high-touch sectors such as hotels, retail malls (as retailers slow their expansion plans) and factory/business parks (as tenants face worker shortage)," he said. He also expects new rules on subletting industrial space may burden that segment of the REIT space.
Read More 5 trends heating up REITs as other stocks stall
But while Chong lowered his forecasts for S-REITs' dividends slightly, he isn't expecting much of a correction in the shares as they still offer yields of around 6.5 percent, well above the 10-year Singapore government bonds' around 2.3 percent yield.
Others also expect macro-economic factors – particularly global interest rates – will weigh more heavily with investors than concerns about S-REITs' operational challenges.
"We are cognizant that there can be a mad rush for exits in yield instruments, if interest rates do spike suddenly," CIMB said in a Singapore strategy note this week. "But if one cannot see the signs for such a situation in the near future, one has no choice but to play the yield game of the market."
Read More Is this the answer for India's dilapidated real estate market?
Since the market now appears to believe that the tapering of the U.S. Federal Reserve's asset purchases won't necessarily lead to interest rate hikes, S-REITs' yield spreads of around 4.5 percentage points don't appear too aggressive, CIMB said, keeping an "overweight" call on the sector.
"Undemanding valuations, high yields, sticky rental rates, high occupancy rates, strong balance sheets and a lack of immediate refinancing needs are the positives," it said.
The bank's real concern is that the low interest rates will spur S-REITs into poorly thought out acquisitions. "The only defense is to steer clear of REITs with a history of doing so," it said.