After two tough years marked by high interest rates and escalating financing costs, real estate investment trust (REIT) unit prices have been significantly impacted.
However, the situation is changing.
In 2025, Singapore REITs have made a notable recovery as interest rate cuts start to take effect.
REITs with robust fundamentals and effective cost management are set to lead in this recovery.
The distribution hikes by several high-quality REITs indicate that the sector may have moved past the worst, offering early benefits to investors benefiting from these easing rate expectations.
Let's examine some of these REITs and explore the factors contributing to their resurgence.
Frasers Centrepoint Trust, FCT (SGX: J69U) — Retail Resilience Rewarded
Frasers Centrepoint Trust (FCT), a dominant player in suburban retail, focuses on malls catering to essential goods and services, with 54% of its gross rental income stemming from such tenants.
For its fiscal year ending 30 September 2025 (FY2025), FCT reported solid results, with a 0.6% year-over-year increase in its distribution per unit (DPU) to S$0.12113.
This growth was propelled by higher gross rental income from the acquisition of Northpoint City South Wing (NCSY).
FCT's committed occupancy remains strong at 98.1%, supported by a notable rental reversion of 7.8%, despite the departure of Cathay Cineplexes at key locations.
Its financial health is stable, with an aggregate leverage of 39.6% as of 30 September 2025, up slightly from 38.5% a year prior, and a debt cost of 3.8%.
FCT is further enhancing its portfolio, acquiring high-performing suburban retail assets like NCSY while divesting non-core holdings.
Additionally, its Asset Enhancement Initiative (AEI) at Hougang Mall has already secured over 80% leasing pre-commitment, ahead of its expected completion by September 2026.
The trust showcases resilience in suburban enterprises, delivering positive rental reversions with nearly full occupancy, while maintaining control over debt and costs to continue incentivizing investors with rising DPU.
AIMS APAC REIT, AA (SGX: O5RU) — Industrial Strength Amid a Softer Economy
AIMS APAC REIT (AA REIT) maintains a portfolio comprising logistics and industrial properties.
The REIT reported a modest rise in DPU to S$0.0472 for the first half of the fiscal year ending 31 March 2026 (1HFY2026), marking a 1.1% year-over-year improvement from 1HFY2025.
Strong demand persists for AA REIT's properties, which boast a 93.3% occupancy rate and 7.7% rental reversion.
While aggregate leverage grew to 35.0% as of 30 September 2025, up from 33.4% the previous year, its blended debt funding cost reduced to 4.2%, from 4.4%.
The acquisition of the Framework Building enhances exposure to high-spec industrial assets, while AEIs at 15 Tai Seng Drive and 7 Clementi Loop increase its portfolio's Weighted Average Lease Expiry (WALE) by securing long-term leases up to 15 years.
The portfolio's weighted average lease expiry is 4.2 years, with 44.6% of leases set to expire in FY2030 and beyond.
AA REIT’s increased DPU is supported by prudent capital management.
In tandem with ongoing improvements on current assets and strategic acquisitions of new ones, along with strong long-term leasing, it stands well-positioned to benefit from the economic rebound, delivering income growth to investors.
Keppel DC REIT (SGX: AJBU) — Data Centres Driving Dividend Growth
Keppel DC REIT's DPU grew by 8.8% year-over-year to S$0.0767 for the first nine months of 2025 (9M2025), up from S$0.0705.
Recent acquisitions, particularly Keppel DC Singapore 7 and 8, have bolstered its distributions.
The portfolio occupancy is stable at 95.8%, with rental reversion at 10% and a solid WALE of 6.7 years.
The REIT’s financial performance has been robust, with gross revenue and net property income (NPI) rising by 37.7% and 42.2% year-over-year, respectively, for 9M2025.
Its aggregate leverage ratio stands at 29.8%, with 74% of its debt at fixed rates, mitigating interest rate risks.
Growth drivers from AI-induced demand and upcoming acquisitions like Tokyo Data Centre 3 could offer future upsides.
Keppel DC's increasing DPU, underpinned by operational strength and structural tailwinds, positions it as a reliable dividend performer in the digital space.
Mapletree Pan Asia Commercial Trust, MPACT (SGX: N2IU) — Bounce Back After Integration
MPACT reported a DPU of S$0.0201 for the second quarter of the fiscal year ending 31 March 2026 (2QFY2026), a 1.5% year-over-year rise from S$0.0198 the previous year.
Strategic portfolio optimization, driven by strong Singapore assets and effective debt management, catalyzed its DPU increase.
Finance costs dipped by 16.4% thanks to lower interest rates and proceeds from divestments channeled towards debt repayment.
Its debt profile remains sound, with an aggregate leverage ratio of 37.6% for the quarter, a decrease from 38.4% the preceding year.
Local assets present further growth potential, though overseas assets exhibit restraint:
Vivocity posted an impressive 7.7% year-over-year NPI growth for the quarter, maintaining 100% committed occupancy and a 14.1% rental reversion. The mall's newly completed AEI of Basement 2 in August 2025 could provide additional benefits.
Nevertheless, in Greater China, occupancy increased to 86.3% from 85.9% in June 2025, but showed a negative 21.6% rental reversion.
Similarly, while Hong Kong's Festival Walk occupancy rose to 98.4% from 97.9% in June 2025, rental reversions dropped, reporting a negative 10.1%.
Conversely, South Korea's Pinnacle Gangnam shows promise with occupancy holding strong at 99.9% compared to June 2025, accompanied by a rental reversion increase of 7.9%.
Going forward, continued rate cuts and clearer policy directions are anticipated to drive further recovery.
MPACT's post-merger strategy to fortify its core businesses in the stable Singapore market while diversifying regionally is beginning to yield results for unitholders.
Implications for Investors
As interest rates decline, REITs, inherently leveraged, benefit from reduced financial strain.
Rising distributions indicate managerial confidence that current favorable conditions are sustainable.
However, not all REITs will reap the same benefits.
Investors should focus on quality REITs with visible income growth, manageable leverage, and a stable tenant base backed by solid sponsors and quality assets.
Strategically selecting resilient REITs may prove lucrative in the coming quarters, not just in terms of dividend income but also potential capital appreciation.
Conclusion – Take Action: Secure the Yield While You Can
As the REIT sector subtly makes a comeback, these four REITs are leading the way with expanding distributions, signaling a shift in sentiment.
This could be an opportunity to secure rising income before the prices catch up.