So far, expectations of rising rates have largely been frustrated. The 10-year U.S. Treasury yield rose from 1.60 percent in mid-May of 2013 to around 3.0 percent at the start of 2014, but it then retraced to around 2.56 percent. That's helped to support yield-chasing across various asset classes, likely including S-REITs.
The average yield spread between S-REITs under Nomura's coverage and Singapore government bonds has fallen below its levels before the taper tantrum began last year, Min Chow said.
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But he expects Singapore's risk-free rate, or the yield on the city-state's 10-year bond, could rise faster than in the U.S. in 2015, possibly to as much as 4.05 percent by the end of next year.
"Concerns over a potential spike at the long end of the yield curve in 2015 could return to weigh on the REITs," Min Chow said. "If REITs' yield spreads were to mean-revert as well, our estimates suggest potential downside risk of an average 15.8 percent to current share prices amongst the REITs we cover."
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After the FTSE ST Real Estate Investment Trust index's near 7 percent rally so far this year, "the S-REITs market could be entering the final lap of its bullish run this year," he said.
Others also think it's too late to get into the S-REIT trade.
Macquarie believes the returns are now less attractive after the sector's outperformance so far this year, expecting only an around 3-4 percent total return, if the Singapore dollar continues to trade around current levels against the U.S. dollar.