A REIT — Real Estate Investment Trust — owns a portfolio of income-producing property (malls, offices, warehouses, data centres) and passes the rental income to unitholders. Singapore's REITs, or S-REITs, are one of the most popular ways locals earn passive income.
Why S-REITs yield more than ordinary stocks
To keep their tax-transparent status, S-REITs must distribute at least 90% of their taxable income to unitholders. That rule forces a high payout, which is why REIT distribution yields — often 5–7% — tend to be higher than the dividend yields of ordinary shares. For individual investors, those distributions are also tax-exempt.
The main types
S-REITs are usually grouped by the property they hold: retail (malls), industrial & logistics (warehouses, business parks), office, hospitality (hotels, serviced apartments), data centre, healthcare, and diversified. Each behaves a little differently — hospitality is more cyclical, while data centres and logistics have been structural growth areas.
The numbers to check before you buy
- Distribution yield — the annual distribution divided by the price. Higher is not automatically better; check it is sustainable.
- Gearing (aggregate leverage) — how much debt the REIT carries against its assets, capped at 50% by regulation. Lower gearing (say under 40%) means more headroom if property values fall.
- Occupancy rate — the percentage of space actually rented. High and stable is good.
- WALE — weighted average lease expiry, i.e. how long current leases run. A longer WALE means more predictable income.
- Sponsor quality — a strong sponsor (CapitaLand, Mapletree, Frasers, Keppel) can back the REIT with a property pipeline and cheaper funding.
The risks
REITs are interest-rate sensitive: they borrow to buy property, so rising rates raise their costs and can pull unit prices down. They can also raise money by issuing new units (a rights issue), which dilutes existing holders. And ultimately their value tracks the property market. None of this makes them bad — it just means the yield is not free of risk.
You can compare every S-REIT by distribution yield on the Singapore REITs page, and each REIT's page shows its full distribution history and upcoming ex-dates.