In a world of rising interest rates, inflation concerns, and evolving market dynamics, many investors are questioning whether investing in REITs in Singapore still offers strong value. Real Estate Investment Trusts (REITs) have long been a favourite among income-seeking investors in Singapore, thanks to their steady payouts and accessibility. But with increased volatility and global uncertainty, is this asset class still worth your attention?
Let’s break down the current landscape and explore whether REITs remain a smart investment choice in Singapore today.
Why REITs Have Been Popular in Singapore
Singapore has one of the most developed REIT markets in Asia, with more than 40 listed REITs spanning various sectors like retail, industrial, hospitality, and data centres. These trusts are required to distribute at least 90% of their taxable income to investors, making them an attractive option for those looking for regular passive income.
Over the past decade, REITs in Singapore have offered average yields between 4% to 6%, with relatively lower volatility than equities — especially appealing in a low-interest-rate environment.
What’s Changing in 2025?
Several market shifts are impacting the outlook for REITs:
Higher Interest Rates
Rising interest rates globally, including in Singapore, have made borrowing more expensive for REITs, which rely heavily on debt to finance acquisitions and operations. This can squeeze profit margins and limit future growth.Post-Pandemic Shifts
While industrial and logistics REITs have thrived due to e-commerce demand, retail and office REITs face structural shifts as remote work and changing consumer behaviour reduce physical space requirements.Global Uncertainty
With geopolitical tension and economic slowdowns in key markets like China and the US, Singapore-based REITs with international exposure may face added risks — or potential opportunities, depending on how they’re managed.
Are REITs Still a Good Investment in Singapore?
Yes — with the right strategy.
REITs remain a valuable addition to a diversified portfolio, especially for those seeking passive income. However, the key today is selectivity. Investors need to go beyond yield and evaluate:
Debt levels and refinancing risk
Asset quality and lease terms
Geographic and sector diversification
Management performance and transparency
For example, logistics and data centre REITs with long-term leases and strong tenants may continue to perform well despite market challenges.
Alternatives to Traditional REITs
If you’re looking for real estate exposure beyond publicly traded REITs, consider co-investment platforms like RealVantage. These platforms allow Singapore investors — especially accredited ones — to access institutional-grade deals in global markets with the transparency and risk controls often unavailable in REITs. Distributions from income-generating properties offer a similar passive income profile, but with more control over where and how your capital is deployed.
Final Thoughts
Investing in REITs in Singapore is still worth considering — but with a more strategic, cautious approach. With rising rates and market shifts, not all REITs are equal. Focus on quality, diversify wisely, and consider supplementing your portfolio with alternative real estate investments that align with your long-term goals.
