Lendlease Reit (JYEU.SI) shares surged 3.03% in Thursday's trading session, riding the wave of a broader rally in Singapore Real Estate Investment Trusts (S-REITs). The stock's impressive gain comes as S-REITs extend their rebound for the second consecutive week, buoyed by increasing expectations of U.S. Federal Reserve interest rate cuts.

The positive sentiment in the REIT sector is largely attributed to global markets pricing in an additional 75-basis-point cut to the Fed's benchmark interest rate in 2025. This outlook has sparked renewed interest in S-REITs, with the seven REITs included in the Straits Times Index (STI) recording an average gain of 5.2% over the past five sessions. Institutional investors have shown strong support, injecting net inflows of $50 million into these REITs, equivalent to 0.1% of their combined market capitalization.

While Lendlease Reit's performance aligns with the broader REIT market trend, it's worth noting that larger-cap S-REITs have generally outperformed their smaller-cap counterparts. The 10 largest S-REITs by market capitalization delivered an average total return of 4.8% from February 19 to March 17, underpinned by $58 million in net institutional inflows. This rally in REITs stands in stark contrast to the STI constituent banks, which saw an average decline of 3.4% over the same period, highlighting the shifting investor preference towards yield-generating real estate assets in the current market environment.