Credit Suisse Group AG warned that gains for Singapore’s real estate investment trusts may be limited this year after a surge in prices in 2017 left valuations looking stretched.

Kum Soek Ching, head of Southeast Asia research in the firm’s private banking operation, pointed to declines in the extra yield from the securities versus risk-free rates from Singapore government bonds. For this year, the REITs may return 3.4 percentage points over a 10-year bond, less than the historical average of 3.7 percentage points, Kum wrote in a note.

The Straits Times Real Estate Investment Trust Index gave a 28 percent total return last year as funds flowed into Singapore and the outlook brightened for property. Though prospects remain good, with rents improving as demand recovers and supply eases, investors may want to wait for more attractive entry levels, the analyst said.

“The prospect of recovering rents and distribution income has been a tailwind for Singapore REITs driving a further re-rating of the sector,” said Kum, who’s based in the city.

This story, written by Pooja Thakur Mahrotri for Bloomberg, first appeared on Jan 12.