When you want to build a reliable passive income portfolio, not many assets can match the consistency of Singapore REITs – gushing steady, recurring dividends.
Previously, I wrote about the best Singapore blue-chip REITs to buy.
As the peak interest rate cycle changes, I’d ask myself whether we’re missing out on any great opportunities in Singapore REITs and their dividends today. Especially as the Singapore REIT market recovers.
Diligence members will know I own some of these Singapore REITs.
With shares of many Singapore REITs trading higher, and many of them having refinancing their debt for 2025, are there still bargains? Here’s 3 Singapore REITs to buy for a potential 6% dividend yield.
Let’s dive in!
In case you missed my recent posts: |
Singapore REIT #1: Digital Core REIT
I call this an unloved Singapore REIT. Actually, I believe Digital Core REIT is one unlucky Singapore REIT. Right after it got listed in 2021, shares fell 50%.
Its lousy stock performance wasn’t because of poor assets. It all got to do with the sharp rise in interest rates over the last few years.
Over the last couple of years, there was just too much fear Digital Core REIT would struggle with higher rates.
At a US$612 million market cap, Digital Core REIT is one of Singapore’s biggest data centre REITs.
Today, it owns 11 modern freehold data centres worth ~US$1.7 billion. And at least half of its data centres are based in the US.
Now, Digital Core REIT’s over 120 customers include some of the world’s largest tech companies. These are highly-rated hyperscalers that rely on data centre infrastructure.
Two things that stand out:
First, Digital Core REIT’s data centres command a high occupancy rate. During its 1H2025 financial results, the Singapore REIT’s portfolio occupancy rose to 98%, up from 96.7% as compared to last year.
Remember what happened when one of its tenants defaulted last time? Digital Core REIT had no trouble replacing its tenant.
Next, this also tells me Digital Core REIT’s tenants are well-diversified, which alleviates the pressure that rental income doesn’t just come from one big source.
Digital Core REIT has a comfortable debt maturity schedule. The only debt it needs to pay is in 2027, with no major debt to refinance until 2029.
This gives it plenty of room to expand. And it doesn’t need to worry about high interest rates.
The thing is, I find the market is not paying attention to this: Digital Core REIT’s sponsor is Digital Realty. And Digital Realty is the world’s biggest data centre operator and developers.
And the sixth largest US REIT. It owns over US$15 billion worth of data centres that could be potentially injected into Digital Core REIT.
What’s more, Digital Realty has been listed for close to two decades on the US stock exchange.
With its massive portfolio of high-quality data centres that’s located across the world, this gives Digital Core REIT plenty of growth opportunities.
At current prices, Digital Core REIT trades at a high 7.6% dividend yield.
Singapore REIT #2: AIMS Apac REIT
Diligence members know AIMS APAC REIT is one of my favourite “under-the-radar” industrial REITs.
Why?
Well, it doesn’t chase the hottest trend or overpay for the fanciest property assets.
The more I read into its business, the more I believe it focuses on one thing: buying high-quality industrial assets at reasonable prices.
In fact, this Singapore industrial landlord has a good track record of asset acquisition over the years, resulting in growing net property income.
At S$1.1 billion market cap, AIMS APAC REIT owns 27 properties mostly in traditional industrial assets. These include logistics, warehouses, business parks and Hi-Tech parks.
During its latest 1QFY2026 results, AIMS APAC REIT grew gross revenues by 0.2% y/y to S$47 million.
Meanwhile, its distributions to unitholders grew by 1.1% y/y with DPU rose to 2.28 Singapore cents per unit.
Now, its dividend payout is well-secured by top tenants including Woolworths, Optus and Schenker Singapore.
More importantly, this industrial landlord has achieved a positive rental reversion of 5.4% with a healthy portfolio occupancy of 93.7% during its latest quarter result.
The big problem with industrial properties in Singapore is the property cycle. Industrial properties can face oversupply in some periods, which could pull down rental reversions.
So far, AIMS APAC REIT has locked in relatively long leases, with its weighted leases to expiry (WALE) at ~4.4 years. This gives it enough room to ride out temporary oversupply in the industrial property market.
At current share price, AIMS APAC REIT trades at a high potential 6% dividend yield.
Singapore REIT #3: Starhill Global REIT
At S$1.3 billion market cap, Starhill Global REIT is one of Singapore’s major retail REITs.
It owns nine properties across Asia, with its two crown jewels being Wisma Atria and Ngee Ann City. Both assets account for this REIT’s entire Singapore portfolio, which is 63% of its total revenues.
You either love or hate Starhill Global REIT’s concentrated assets. Put it this way, its master and anchor leases account for 52% of its gross rental income today.
For instance, Toshin Development Singapore Pte Ltd, which owns Ngee Ann Property, which includes key tenant Takashima, has recently renewed its lease till June 2043. This gives it plenty of room to lock in good rental income for many years.
Like any retail landlord, one big problem is Starhill Global REIT is more exposed to the risk of e-commerce compared to other retail REITs.
However, I believe prime Orchard Road malls remain irreplaceable considering it attracts tourists and a different profile of shoppers.
During its latest 2HFY24/25 results, Starhill Global REIT’s gross revenues grew 0.7% y/y to S$95 million.
Its net property income remained stable and continued to pay a steady DPU of 1.85 Singapore cents per unit.
This is despite higher borrowing costs. Its positive results were driven by higher contributions from both Singapore and Australia properties.
Starhill Global REIT continues to evolve its tenant mix, adding fragrance retailer Oudamor at Plaza Arcade and watch repair service Watchworks Studio at The Starhill.
It also added nail salon Nailz Haus and women’s wellness concept Prologue in Ngee Ann City. These are luxury brands that command premium pricing that reflects the need for a flagship store.
At current shares, Starhill Global REIT trades at a potential high 6.3% dividend yield.
Special Mention: Lendlease REIT
I know I know, Lendlease REIT currently pays 5.5% dividend yield.
Let me explain.
This is an underrated Singapore retail REIT. At S$1.6 billion market cap, Lendlease REIT owns a trophy asset, 313@Somerset that’s along Orchard Road belt.
In my opinion, this is one of the few top-in-class retail assets. WIth close to full occupancy at 98.8%, 313@Somerset commands a strong rental income for Lendlease REIT.
While big, luxury retail malls along the Orchard Road belt including Paragon and Mandarin Orchard target high-end shoppers, 313 @Somerset is different.
Instead, it’s one of the few retail malls in Orchard Road that appeals to the youth.
Some of its new tenants include Meilleur Moment, a contemporary women’s fashion boutique and One Fermented Rice, a specialty concept food stall.
Here’s the thing, 313@Somerset is the crown jewel of Orchard Road belt.
Why?
Because you can’t build any more shopping malls in the retail submarket of Orchard Road.
What’s more, new retail supply especially in prime locations will be limited, which will support a healthy foot traffic for retail assets like 313@Somerset.
During its latest 2HFY2025 financial results, its gross revenues grew 1.9% y/y to S$103 million.
Meanwhile its net property income grew 2.7% y\/y to S$73.8 million. Its DPU grew 1.8% y/y to 1.8 Singapore cents per unit.
As I’ve mentioned with my Diligence members, Lendlease REIT’s initial high borrowing costs have hit its DPU.
However, I expect its borrowing costs to be at peak levels. This should allow Lendlease REIT to grow its DPU from here.
Like I’ve said, Lendlease REIT is a special mention precisely because it’s currently trading at 5.5% dividend yield.
As Lendlease REIT hit its peak borrowing costs, I expect its DPU to meaningfully climb in the future, current shares should hit a potential 6% dividend yield.
My final thoughts
First things first, I own Digital Core REIT, AIMS APAC REIT and Lendlease REIT. The thing is, not all Singapore REITs are created equal.
Some might struggle with high borrowing costs. Some might suffer poor occupancy rates.
What’s crucial is to figure out its location and management ability to improve its rental income.
More importantly, as a dividend investor I’d prefer to pick high-quality assets that are secured by a good tenant profile and growing dividends.
Sometimes, investing can be simple.
Willie Keng, CFA
Founder, Dividend Titan
