Real Estate Investment Trusts (REITs) have become increasingly popular investment options for affluent and retail investors in Singapore. High-net-worth individuals are drawn to Singapore REITs for their steady dividends and diversification benefits.
REITs allow you to gain exposure to the property market without directly buying real estate.
We'll go over what REITs are, their different types in Singapore, the advantages and disadvantages of investing in them, how to get started, and how they stack up against other investments like Kilde in this extensive guide.
By the end, you'll have a well-defined plan for boosting your portfolio through REIT investments in Singapore.
What Are Real Estate Investment Trusts (REITs)?
A business or trust that owns, manages, or finances real estate that generates revenue is known as a Real Estate Investment Trust (REIT).
A REIT essentially combines investor funds to buy and operate a portfolio of real estate, such as office buildings, shopping centres, hospitals, hotels, and industrial complexes.
In a REIT, investors purchase units (shares) of the trust and get a portion of the profits made by the properties, typically in the form of consistent dividends.
{{cta-component}}
How REITs Work
REITs are structured to pass through most of their rental income to investors.
By Singapore regulations, REITs must pay out at least 90% of their taxable income as dividends.
This ensures a high payout ratio, which is why REITs are known for providing stable income.
The REIT collects rent from its tenants and, after expenses, distributes the majority of that income to unitholders (investors), usually quarterly or semi-annually.
Unlike stocks that reinvest profits, REITs act more like income vehicles, paying out profits on a regular basis rather than holding them.
Because they are listed on the stock exchange, REIT units can be bought and sold quickly. This liquidity is a significant advantage over owning physical properties.
You can enter or exit a REIT investment by trading its units on the Singapore Exchange (SGX) during market hours, just like trading stocks. REITs are thus a liquid way to invest in real estate – something that traditional property ownership cannot offer.
REITs vs. Physical Property
When comparing REIT investments to buying actual property, there are some key differences to consider:
In summary, REITs offer a turnkey way to invest in real estate.
You enjoy the rental income (via dividends) and potential capital appreciation of properties, but without dealing with tenant issues or coming up with a huge sum of money upfront. This makes REITs especially attractive for investors who want real estate exposure but value convenience and liquidity.
Types of REITs in Singapore
With more than 40 REITs listed on the SGX, Singapore's REIT market — often referred to as the S-REIT market — is among the most developed in Asia.
These REITs in Singapore span various property sectors and strategies. Here are the main types of REITs available and what they invest in:
Retail REITs
Focus on income-generating retail properties such as shopping malls.
Example: CapitaLand Integrated Commercial Trust, which owns prominent malls like Raffles City and Funan Mall.
Office REITs
Invest in office buildings, often in prime locations like the Central Business District (CBD).
Example: Keppel REIT, which holds iconic office properties including Marina Bay Financial Centre.
Industrial REITs
Specialize in industrial properties like warehouses, logistics hubs, and factories.
Example: Mapletree Industrial Trust, which includes major logistics facilities and business parks.
Healthcare REITs
Own healthcare-related properties such as hospitals, clinics, and nursing homes.
Example: Parkway Life REIT, which invests in hospitals and eldercare facilities across Asia.
Data Centre REITs
Invest in data storage and processing facilities (data centers), which are in growing demand in the digital economy.
Example: Keppel DC REIT, which owns multiple data centers in Asia and Europe.
Diversified REITs
Hold a mixed portfolio of property types to reduce sector-specific risk.
Example: Frasers Logistics & Commercial Trust, which has a blend of industrial, office, and business park assets.
Each type of REIT has its own risk-return profile. For instance, Retail and Office REITs often provide stable cash flow but can be sensitive to economic cycles (affecting consumer spending or office occupancy).
Industrial and Data Centre REITs may offer higher growth potential due to e-commerce and digital trends, but could face technological changes. Diversified REITs give a bit of everything, smoothing out sector-specific booms and busts.
Notably, many Singapore REITs are not limited to local properties. Over 90% of S-REITs own properties outside Singapore (across Asia-Pacific, Europe, or the US).
This means when you invest in a Singapore REIT, you often get international real estate exposure as well, which further diversifies your investment.
{{cta-component}}
Why Invest in Singapore REITs?
Singapore REITs (S-REITs) have some strategic advantages that make them appealing, especially to investors seeking regular income and portfolio diversification. Here are key reasons to consider investing in REITs in Singapore.
Stable Dividends (Passive Income)
REITs must distribute at least 90% of their taxable income as dividends. This legal requirement makes them a popular choice for those seeking reliable passive income.
As a REIT unitholder, you essentially receive rental income from the underlying properties without doing any property management yourself.
Many S-REITs offer dividend yields in the 5%–7% range annually. A key example would be, CapitaLand Integrated Commercial Trust (one of Singapore’s largest retail REITs) has a dividend yield of around 5.2%, providing investors steady cash flow from its portfolio of malls.
These regular payouts make REITs an attractive option for income-focused investors, including retirees or anyone looking to supplement their salary with investment income.
Diversification
Investing in REITs offers instant diversification within the real estate sector.
With a single REIT, you might get exposure to dozens of properties across different locations and sectors. This spreads out your risk; for example, a diversified REIT's portfolio can balance the retail and logistics/warehouse sectors if the former is struggling while the latter is flourishing.
You're also diversifying geographically because a lot of Singapore REITs own assets abroad. You gain exposure to real estate markets in countries like the US, Australia, China, or Europe, all through a Singapore-listed vehicle.
Such diversification is hard to achieve if you invest in one or two physical properties on your own.
Liquidity and Flexibility
Unlike owning a physical building, REIT units can be bought or sold quickly on the stock exchange.
If you need cash or want to rebalance your portfolio, you can sell your REIT holdings with a few clicks, typically receiving funds within a few days.
There is no lengthy selling process or huge transaction cost as there would be with actual real estate. This liquidity allows investors to respond to market conditions or personal cash needs.
Additionally, investing in REITs requires much lower capital than buying property. You could start with just a few hundred dollars (the cost of many REIT units) instead of a 20% downpayment on a S$1 million condo. REITs thus provide an affordable entry point into the real estate asset class.
Professional Management
When you invest in a REIT, you are entrusting your money to professional real estate managers.
These REIT managers handle tenant acquisition, lease negotiations, property maintenance, and regulatory compliance. For investors, this means you don’t have to worry about the day-to-day hassles of property management.
The properties are managed by experienced teams whose job is to maximize rental yields and property values. This is particularly appealing to high-net-worth investors who may not have the time or desire to manage a large property portfolio themselves.
You effectively outsource the work while enjoying the income.
To sum up, investing in Singapore REITs can generate a stable and relatively predictable income stream (through dividends) along with the potential for capital appreciation of the REIT units over time (if property values rise).
Thanks to diversification and professional management, REITs can be a low-effort way to add real estate exposure to your investments.
It’s no surprise that today the S-REIT sector is a significant part of the local market – as of 2025, REITs accounted for about 12% of the Singapore Exchange’s total market capitalization, underlining their importance in investors’ portfolios.
Example: REIT Yields vs Other Investments
Income investors often compare REIT dividend yields to other relatively safe investments like bank deposits or government bonds.
Singapore REITs typically yield around 5–7% annually on average. In fact, the average trailing 12-month yield of S-REITs was approximately 6.3% as of early 2025.
This significantly outperforms traditional savings accounts – for example, cash in a normal savings account might earn well below 1% interest per year, and even a 12-month fixed deposit in Singapore might offer around 3% interest in the current environment.
REITs also tend to yield more than Singapore government bonds (the 10-year Singapore government bond yield was about 2.6% in early 2025).
The takeaway is that REITs can provide a much higher income return than keeping money in the bank. Of course, REIT prices can fluctuate and are not risk-free, but for investors willing to accept some market volatility, the yield pickup is very compelling. This yield advantage is one of the primary reasons both individuals and institutions allocate funds to REITs for income generation.
{{cta-component}}
Pros and Cons of Investing in REITs
Like any investment, REITs come with their benefits and drawbacks. It’s important to understand both sides before diving in.
Benefits of Investing in REITs
- Regular Passive Income
REITs generate passive income through the dividends paid out from rental earnings. This makes them ideal for investors seeking consistent cash flow (e.g. for living expenses or reinvestment).
Many treat REITs as a substitute for owning a rental property, but without the work.
- Professionally Managed Assets
All properties in a REIT are managed by professional fund managers and property managers. Investors don’t need real estate expertise – you effectively have experts making decisions to maximize property value and occupancy.
This hands-off approach frees your time and ensures the assets are being optimally managed.
- Low Barriers to Entry
REITs have an affordable entry point. You can invest in prime real estate by buying a small number of REIT units. For example, if a REIT’s unit price is $1 and the board lot size is 100 units, an initial investment is just ~$100 (excluding brokerage fees).
Compare that to hundreds of thousands needed for a down payment on physical property. REITs make real estate investing accessible to those without huge capital.
- Diversification within Real Estate
By buying one REIT, you get exposure to many properties. This diversification can protect you from the poor performance of any single building or tenant. It also lets you invest in types of real estate you might not easily own directly (e.g. data centers or overseas malls).
- Liquidity and Flexibility
As mentioned, you can quickly adjust your holdings by trading REITs. You’re not locked in long-term – an advantage if you need to rebalance or raise cash.
There are also no lock-up periods; you simply sell on the market.
- Tax Advantages
REIT dividends in Singapore are very tax-efficient. Distributions from S-REITs to individual investors are tax-exempt in Singapore. This means the dividend income you receive is not subject to income tax for most individual investors, unlike interest from bonds or rental income from directly owned property which could be taxable.
(Do note: if you invest in REITs through a corporate entity or as part of a business, different tax rules may apply.)
Risks and Considerations
- Market Price Volatility
Although REITs are based on physical properties (a relatively stable asset), their unit prices can fluctuate on the stock market. Economic downturns, market sentiment, or black swan events (like a pandemic) can cause REIT prices to drop, just as they would for stocks.
If you need to sell during a downturn, you might incur a loss even if the properties are still fundamentally sound.
- Interest Rate Sensitivity
REITs tend to be sensitive to interest rate changes. When interest rates rise, income investments like REITs become comparatively less attractive (since bonds and deposits yield more in a high-rate environment).
Also, higher interest rates increase borrowing costs for REITs (most REITs take on debt to finance property purchases). This can squeeze their profit margins. For example, in a rising rate scenario, investors might demand higher dividend yields from REITs, causing REIT prices to fall.
It’s important to monitor the interest rate outlook if you invest in REITs.
- Property Market Risks
The performance of a REIT is directly tied to the real estate market. If property values decline or occupancy rates fall (say, due to oversupply of office space or a recession reducing retail sales), the REIT’s income and asset values may drop.
Sector-specific risks are also a factor – e.g., a Retail REIT is exposed to the health of the retail industry; an Office REIT depends on businesses renting office space.
Adverse conditions like an economic recession, shifts in consumer behavior (such as e-commerce impacting malls), or remote work trends (reducing office demand) can all impact REIT earnings.
Investors need to be aware that REITs are not risk-free and should assess the underlying properties’ prospects.
- Leverage and Credit Risk
REITs often use debt to finance acquisitions. While moderate leverage can enhance returns, too much debt can be risky. If credit conditions tighten, a highly leveraged REIT might struggle to refinance loans or may pay more interest, hurting distributions.
Singapore regulations currently cap REIT leverage (gearing) at 50% of assets, which provides some safeguard. Still, checking a REIT’s gearing ratio and debt maturity profile is a wise step.
- Regulatory and Tax Changes
REITs enjoy certain tax benefits (like the tax transparency treatment). Changes in regulations or tax laws could affect their attractiveness.
For example, if the government reduced the tax transparency (currently extended through 2025 for some concessions) or imposed new requirements, it could impact REIT distributions. Such changes are infrequent but worth keeping in mind for long-term investors.
Despite these risks, REITs have historically been relatively stable compared to pure equities, and the income component tends to cushion against market volatility.
The keys to managing REIT risks are diversification (don’t put all your money in one REIT or one sector) and due diligence (study the quality of the REIT’s properties and management).
{{cta-component}}
How to Choose the Best REIT to Invest In
With dozens of REITs in the market, how do you decide which REITs (Singapore or otherwise) are right for your portfolio?
Here are some key factors to consider when evaluating a REIT:
Property Quality and Location
Examine the assets held by the REIT. Are they high-quality, well-located properties?
Prime location properties (say, a shopping mall on Orchard Road or an office in Marina Bay) tend to have more resilient demand and command better rent, even during downturns. High-quality buildings also attract strong tenants and have lower maintenance issues.
A REIT with a portfolio of aging, poorly located properties might carry more risk (vacancies, falling rents) than one with trophy assets.
Occupancy Rates and Lease Terms (WALE)
Look at the REIT’s occupancy rate – ideally it’s high (above 90%). Also check the WALE (Weighted Average Lease Expiry), which measures how long until the REIT’s leases expire on average.
A longer WALE (e.g. 5-10 years) means tenants are locked in for years, providing secure rental income. A short WALE could indicate that many leases are due for renewal soon, posing the risk of non-renewal or rent adjustments.
REITs with long-term leases to reputable tenants (especially government or blue-chip corporate tenants) offer more stability.
Financials and Gearing
Review the REIT’s financial health. Key metrics include the gearing ratio (debt-to-asset ratio) and interest coverage ratio.
A gearing below ~40% is considered prudent in Singapore (the regulatory limit is 50%). Lower debt means less risk in a rising interest rate environment. Also, check if the REIT has been consistently growing its Distribution Per Unit (DPU) – increasing DPU over the years is a positive sign.
A strong balance sheet and a track record of steady or rising distributions indicate a robust REIT.
Sponsor and Management Track Record
Larger property companies, such as CapitaLand, Mapletree, Frasers, and Keppel, sponsor a huge number of REITs in Singapore.
Being able to access a pipeline of assets (via the right-of-first-refusal on the sponsor's properties) and financial help when required are two major benefits of having a strong sponsor. For instance, REITs sponsored by Mapletree gain access to the sponsor's extensive global network and real estate knowledge.
Research the REIT manager’s reputation: Have they made accretive acquisitions? Do they manage debt well? Have there been any governance issues? A capable and trustworthy management team is crucial for long-term REIT success.
Dividend Yield and Price Valuation
Compare the REIT’s current dividend yield to peers and its historical range.
If a REIT is yielding significantly more than peers, the market might be pricing in higher risk (or a potential decline in DPU). Conversely, a very low yield might indicate the REIT is highly valued (or investors expect strong growth).
Also consider the Price-to-Book ratio; REITs trade around their net asset value. If a REIT trades at a steep discount to NAV, investigate why (it could be a value opportunity or a warning sign). Ultimately, choose a REIT that balances yield with quality – the highest yield is not always the best if the assets are risky.
Sector Outlook
Consider the outlook for the sector(s) the REIT operates in.
For instance, the e-commerce boom is positive for logistics and warehouse REITs, but negative for retail mall REITs. The return-to-office trend (or lack thereof) affects office REITs.
If you have a view that tourism will rebound strongly, hospitality REITs (hotels) might be interesting. Align your REIT picks with sectors you believe have favorable demand-supply dynamics in the coming years.
By carefully evaluating these factors, you can identify REITs that fit your investment goals – whether that’s maximizing income, ensuring stability, or achieving growth.
It often helps to shortlist a few REITs and then dive deeper into their annual reports and investor presentations, or consult research analysts’ reports for additional insight.
{{cta-component}}
Notable REITs in Singapore
To give a sense of the opportunities, here are a few prominent Singapore REITs and some of their key details (as of early 2025):
Yields are indicative and will vary with market prices; they are shown here to illustrate the range of income returns across different REIT types.
There are many more S-REITs covering hospitality (e.g. Ascott Residence Trust), U.S. office buildings (Manulife US REIT), retail malls in China (CapitaLand China Trust), and so on. Each has its own niche.
Collectively, the REIT sector is a major part of Singapore’s stock market. S-REITs have a total market capitalization of around S$100 billion, roughly 12% of SGX’s market cap.
The sector has grown steadily at ~6% per year over the last decade.
Singapore is often regarded as a global REIT hub, attracting listings of real estate trusts from around the region due to its strong regulatory framework and investor appetite.
Moreover, REITs have proven resilient and competitive as income investments. As noted earlier, the average dividend yield of Singapore REITs (~5–6% annually) is significantly higher than typical bank deposit rates or government bond yields.
This yield premium, combined with the potential for capital gains, makes REITs a compelling option for investors looking to beat inflation and generate wealth over time.
How to Buy REITs in Singapore
One of the advantages of REITs is that they are easy to invest in. If you’re ready to add some REIT exposure to your portfolio, here are the basic steps to get started:
Open a Brokerage Account
You will need a brokerage account that lets you trade on the Singapore Exchange (SGX).
Many local and international brokerages offer access to SGX. Ensure you choose a reliable platform with reasonable fees.
For high-net-worth investors or family offices, consider if the broker provides any additional services or research on REITs.
Once your account is set up and funded, you can transact in Singapore-listed securities, including REITs.
Research and Select REITs
Before buying, do your homework on which REIT(s) to invest in.
Use the criteria mentioned in the previous section – property type, yield, performance, etc. – to identify promising candidates.
You might read analysts’ reports, check financial metrics, and compare multiple REITs. It is also advisable to monitor the state of the market; for instance, REIT prices may be impacted if an increase in interest rates is anticipated (perhaps a good entry moment).
In order to comprehend management's approach, many investors also study annual reports or attend REIT AGMs.
You don't have to choose just one; you can diversify your investment by distributing it among several REITs. For wider exposure, you could even want to look at a REIT exchange-traded fund.
Place Your Order
Once you’ve decided on a REIT to buy, place an order through your brokerage platform.
REITs are traded in lots (usually 100 units per lot on SGX). Decide how many units (or lots) you want based on your budget.
For example, if a REIT is trading at S$1.20 per unit, buying one lot (100 units) would cost S$120 (plus a small brokerage commission). You can choose a market order (buy at the current market price) or a limit order (specify a price you’re willing to pay).
After your order is executed, the REIT units will be deposited into your account. Going forward, you will receive dividends from the REIT automatically into your account on payout dates. You can monitor your REIT investment via your brokerage’s app or statements.
Optional – Use CPF or SRS funds
Singapore investors have the option to invest in REITs using CPF Investment Scheme or Supplementary Retirement Scheme (SRS) funds.
This can be a way to enhance returns on those funds, but there are rules and risk considerations involved.
If you’re a high-net-worth individual, you might also explore buying REITs through managed accounts or private banking services which can execute large orders with minimal market impact.
Stay Informed
After investing, keep track of your REIT’s performance and news.
Watch for quarterly financial results, announcements of new property acquisitions or divestments, changes in occupancy, etc.
REITs may occasionally do equity fund-raisings (e.g., rights issues or private placements) to raise money for new purchases – as a unitholder you should evaluate these opportunities and participate if it’s beneficial.
Periodically review whether the reasons you bought the REIT (yield, quality, outlook) still hold, and rebalance if necessary.
Buying REITs is as straightforward as buying any stock. The key difference is what you’re buying – in this case, a slice of a property portfolio and its income stream.
Ensure it fits your overall investment strategy and time horizon. REITs can be held for the long term to accumulate dividends, but you should be comfortable with the interim price fluctuations.
Conclusion: Should You Invest in REITs?
Should you invest in Singapore REITs? The answer depends on your financial goals and risk appetite, but REITs can play a very useful role in a balanced investment portfolio.
For investors seeking regular income, REITs offer yields that are hard to find elsewhere at comparable risk levels. They provide exposure to the real estate market’s upside (and downside) without the hassles of direct property ownership.
Over the past decades, many Singaporeans – from young professionals to retirees and high-net-worth individuals – have included REITs as a core part of their wealth-building and income strategies.
Before you invest, consider the following:
- Investment Objective
Are you investing for income, growth, or capital preservation? REITs are primarily income instruments with some growth potential. If you need steady cash flow, REITs could be suitable. If you want aggressive growth, you might look at other assets or only allocate a portion to REITs.
- Risk Tolerance
While generally less volatile than individual stocks, REITs do carry market and sector risks (as discussed in the risks section). Can you tolerate the price dipping 10-20% in a bad year? If you require absolute stability, maybe fixed deposits or bonds are more appropriate, albeit with lower returns.
- Diversification
How does a REIT investment complement your existing portfolio? If you already own physical properties, you might focus on REITs in sectors you don’t have exposure to (e.g., data centers or overseas properties). If you mostly have stocks and bonds, adding REITs introduces real estate exposure which can improve your portfolio’s diversification.
Many investors find that REITs hit a “sweet spot” – offering higher income than bonds, but with lower volatility than many equities, and tangible underlying assets. Singapore’s REIT framework is also well-regulated and transparent, which adds to investor confidence.
If you decide to invest in REITs, start with a solid foundation of research. Find reputable REITs with solid sponsors and portfolios that you like. As you gain familiarity, you may start with a smaller position and work your way up.
Keep in mind that investing in REITs is more about generating income and building consistent wealth than it is about making rapid money. Because of compounding, reinvesting your REIT earnings can greatly increase your overall gains over time.
Finally, beaware of the broader market. Economic cycles, interest rate changes, and property market trends will influence REIT performance. By keeping an eye on these factors and your individual REIT’s developments, you can make informed decisions about when to buy more, hold, or trim your positions.
In conclusion, investing in Singapore REITs can be a rewarding strategy for those looking to enhance their passive income and diversify their investments. With prudent selection and a long-term perspective, REITs can provide the dual benefits of regular dividends and exposure to the robust real estate market of Singapore and beyond.
{{cta-component}}
REITs vs Kilde: A Quick Comparison
As you explore ways to generate income from your investments, it's worth considering how REITs compare to other options in the market. One such alternative is Kilde, which offers a different risk-reward profile for those looking beyond real estate exposure.
While REITs are a popular choice for income-focused investors, Kilde offers a distinct alternative for those seeking higher yields. Kilde connects accredited investors with pre-vetted private credit opportunities, providing up to 15% annual returns through senior secured loans.
Unlike REITs, which invest in property and are publicly traded, Kilde focuses on private lending and operates through a regulated, MAS-licensed platform.
Key Differences at a Glance:
- Returns: REITs ~5–7% p.a. | Kilde up to 15% p.a.
- Liquidity: REITs are liquid (SGX-traded) | Kilde investments have fixed terms (12–36 months)
- Risk Profile: REITs tied to real estate market | Kilde tied to borrower creditworthiness
- Access: REITs available to all | Kilde for accredited investors only
- Fees: REITs have embedded trust fees | Kilde has zero transaction fees
For high-net-worth individuals, Kilde may serve as a complement to REITs — offering enhanced yield and diversification beyond traditional real estate.
Disclaimer Notice
This page is provided for general informational purposes only and does not constitute legal, financial, or investment advice. Please refer to our Full Disclaimer for important details regarding eligibility, risks, and the limited scope of our services.
