In Singapore's investment sector, REITs have long been considered a pillar, offering a balance of stability and regular income to investors.

As we approach the last quarter of 2025, REITs are navigating through a complex environment marked by interest rate fluctuations, evolving tenant expectations, and overarching structural trends like digitization, which are leading to varied outcomes across different sectors.

Traditional office and retail sectors are grappling with new work patterns and changing consumer habits, whereas niche areas like data centers are thriving due to the increasing demand driven by AI.

For those focused on income, it is crucial to identify REITs capable of adapting to these changes while still offering steady payouts and growth potential.

This October, we focus on three Singapore REITs, each presenting unique risk-return profiles.

Keppel DC REIT: Expanding Footprint in Japanese Data Centers

Keppel DC REIT reported outstanding results for the first half of 2025, with distribution per unit (DPU) increasing by 12.8% year-on-year to S$0.05133.

The gross revenue witnessed an increase of 34.4% to S$211.3 million, with net property income climbing 37.8% to S$182.8 million.

This success was driven by strategic acquisitions and a significant 51% rental reversion from a major lease renewal.

Continuing on this trajectory, the REIT is set to acquire a 98.47% stake in Tokyo Data Centre 3 for approximately S$707 million.

This freehold hyperscale facility in Greater Tokyo is fully leased to a major global hyperscaler for 15 years, featuring built-in annual rent adjustments, thus ensuring cash flow resilience against Japan's typically fixed-rent market.

The acquisition is DPU-accretive by 2.8%, bolstering the REIT’s status in the Asia Pacific's largest data center hub (excluding China), where high demand confronts a limited supply due to power and construction constraints.

Post-acquisition, assets under management will total S$5.7 billion across 25 data centers in 10 countries, with projected portfolio occupancy to rise to 95.9% and a weighted average lease expiry (WALE) of 7.2 years.

Projected AI workloads, expected to account for 70% of global data center demand by 2030, position the REIT to benefit from these long-term industry trends.

The latest insights will be revealed when the REIT reports its results on 29 October 2025.

Keppel REIT: Strategic Transition into Retail

Keppel REIT reached a significant milestone on 8 October 2025, marking its inaugural venture into retail by acquiring a 75% stake in Sydney's Top Ryde City Shopping Centre for roughly S$334.8 million.

This freehold mall offers a 6.7% initial property yield with a 1.34% pro forma DPU increase, complemented by a defensive tenant mix—77% comprising non-discretionary tenants such as Coles, Woolworths, and ALDI, ensuring income stability.

With this acquisition, the REIT's portfolio will expand to S$9.8 billion across 14 properties in Singapore (76.0%), Australia (20.2%), South Korea (2.9%), and Japan (0.9%), maintaining office assets as the core at 95.8%, with retail assets making up 4.2%.

This strategic pivot comes amid varied results.

During the first half of 2025, Keppel REIT demonstrated operational strength, with property income rising by 9.1% year-on-year to S$136.5 million and net property income soaring by 11.8% to S$108.3 million, attributed to contributions from 255 George Street and improved occupancy at 2 Blue Street.

However, the DPU declined by 2.9% to S$0.0272 as management opted to receive 25% of its fees in cash instead of the previous 100% in units.

The portfolio occupancy remained robust at 95.9%, with strong rental reversion of 12.3% and a WALE of 4.8 years.

Likewise, Keppel REIT is scheduled to release its latest results on 29 October 2025.

Lendlease Global Commercial REIT: Strategic Growth Initiatives

Recently, Lendlease Global Commercial REIT, known as LREIT, agreed to sell the Jem office component for S$462 million after the financial year-end.

The net proceeds will primarily reduce debt, lowering the gearing ratio from 42.6% to about 35% on a pro forma basis, thereby strengthening the REIT’s financial standing for prospective growth.

LREIT's portfolio includes Jem and 313@Somerset in Singapore and the Sky Complex in Milan, with total assets under management amounting to S$3.76 billion as of June 30, 2025.

For fiscal year 2025, gross revenue fell by 6.5% year-on-year to S$206.5 million, with net property income decreasing by 10.0% year-on-year to S$148.8 million.

The DPU decreased by 6.9% year-on-year to S$0.036, reflecting the previous year’s one-time supplementary rent due to the Sky Complex’s lease restructuring.

Despite revenue challenges, fundamental portfolio health remains intact with a committed occupancy of 92.1% (retail at 99.5%; office at 86.6%), and a positive retail rental reversion rate of 10.2% for the year.

Construction of a multifunctional event space next to 313@Somerset has started, expected to be completed in the second half of 2026, further boosting the REIT’s standing in the Somerset vicinity.

LREIT aims to provide a business update on 30 October 2025.