Singapore REITs have faced significant pressure over the past two years due to rising financing costs, driven by high interest rates and subdued investor sentiment.

However, with potential interest rate cuts on the horizon, the outlook for REITs is expected to improve, potentially paving the way for recovery.

Lower borrowing costs typically enhance distributions, support asset valuations, and restore market confidence, making this an opportune time to revisit high-quality REITs.

Here are four Singapore REITs well-positioned to benefit from an eventual decline in interest rates.

Mapletree Pan Asia Commercial Trust (MPACT, SGX: N2IU)

MPACT owns a diversified portfolio of commercial and retail properties across Singapore, Hong Kong, China, Japan, and South Korea.

For Q2 FY2025/2026, the REIT reported a DPU of S$0.0201, up 1.5% YoY, primarily driven by strong performance in its Singapore assets.

Net property income (NPI) declined 2.2% YoY to S$163.9 million due to weaker contributions from overseas markets.

Committed occupancy stood at 88.9%, down from 96.4% a year earlier, reflecting challenges in international markets.

Aggregate leverage improved to 37.6%, while the cost of debt decreased to 3.23%.

VivoCity, a key asset, achieved 100% occupancy, 14.1% rental reversion, and 4.8% YoY growth in tenant sales.

Despite headwinds from softer retail demand in Hong Kong and China, MPACT remains a resilient cross-border REIT, supported by stable Singaporean assets, and stands to gain as financing costs ease.

Mapletree Industrial Trust (MIT, SGX: ME8U)

MIT manages a portfolio of industrial properties and data centers across Singapore, North America, and Japan, with assets under management totaling S$8.5 billion.

DPU for Q2 FY2025/2026 fell 5.6% YoY to S$0.0318, primarily due to the absence of one-time divestment gains and foreign exchange pressures.

Portfolio occupancy stood at 91.3%, with a weighted average rental reversion of 6.2% for its Singapore assets, which account for 45.2% of AUM.

Leverage improved to 37.3% from 40.1% in the previous quarter, with average borrowing costs declining to 3.0%.

Data center demand remains a key growth driver for the trust.

However, borrowing costs may rise as interest rate swaps mature and are repriced.

With stable local performance and exposure to the digital economy, MIT is a solid long-term investment.

AIMS APAC REIT (AA REIT, SGX: O5RU)

AA REIT is a mid-cap industrial REIT with investments in industrial, logistics, and business park properties in Singapore and Australia.

For H1 FY2026, DPU rose 1.1% YoY to S$0.0472.

Portfolio occupancy was 93.3%, with a weighted average lease expiry (WALE) of 4.2 years.

Excluding temporary tenant movements, committed occupancy would be 95.1%.

Aggregate leverage stood at 35.0% as of September 30, 2025, with undrawn facilities and bank balances of approximately S$169.7 million.

With 82.5% of rental income from tenants in essential industries, the REIT enjoys stable cash flows.

Rental reversions for H1 FY2026 were positive at 7.7%.

While its smaller size limits acquisition flexibility, AA REIT offers high yield and strong income visibility, making it an attractive option if interest costs decline.

CapitaLand Ascendas REIT (CLAR, SGX: A17U)

CLAR is Singapore’s largest listed industrial REIT, with a diversified portfolio spanning industrial, logistics, business parks, and data centers across Asia Pacific, Europe, and the US.

DPU for H1 2025 dipped 0.6% YoY to S$0.07477 due to a larger unit base following a private placement in May 2025.

Aggregate leverage was 37.4% as of June 30, 2025, rising to 39.8% by September 30, 2025, after accretive acquisitions.

Rental reversions for renewed leases in Q3 2025 were strong at 7.6%.

Backed by its blue-chip sponsor, CapitaLand, CLAR benefits from development pipelines, refinancing capacity, and strategic deal flow.

In 2025 alone, the REIT completed acquisitions worth S$724.6 million and announced an additional S$592.6 million in proposed deals.

Key risks include currency fluctuations and rising property taxes and operating expenses.

CLAR is a high-quality industrial REIT with significant revaluation potential once interest rates stabilize.

Why Rate Cuts Could Drive REIT Recovery

Lower interest expenses directly increase distributable income, benefiting unitholders.

As bond yields fall, REIT yields become more attractive, drawing investor interest back to the sector.

Lower rates also facilitate asset revaluations and portfolio expansions, enhancing total returns.

Historically, REITs tend to outperform early in the rate cut cycle as investors shift focus back to yield-driven investments.