Can Elite UK REIT offer a good yield? Interview with CEO Josh Liaw

What happened?

Singapore REITs have been back in focus recently.

Recently, we shared how Singapore REITs may benefit from lower interest rates. 

We also highlighted a few Singapore REITs offering a dividend yield of above 5%.

One of the best performing Singapore REITs so far this year is Elite UK REIT, which owns office assets across the UK.

In this episode of the Beansprout Podcast, we sat down with CEO Josh Liaw to discuss what is driving an improvement in the REIT's dividends, and what could fuel its next phase of growth.

Catch the full conversation in the video below.

Interview with Elite UK REIT CEO: What's driving growth and improving distributions for the REIT

01:13 – Why Invest In UK Government-Leased Assets

Elite UK REIT focuses mainly on UK government-leased properties, offering stability.

• 99%+ of cash flows come from leasing properties to the UK government.
• Their 150-assets portfolio consists mainly of government offices and job centres—not retail or hospitality.
• British job centres serve a crucial social role, functioning as community access hubs across the country.
• Investing in GBP appeals to parents and others with UK ties due to currency needs.

02:10 – What Job Centres Are And How They Generate Cash Flow

Job centres are vital to the UK’s social infrastructure, supporting consistent rental income.

• They provide employment and social support services for jobseekers.
• There are about 150 such assets, distributed to ensure all UK residents can access them within 20 minutes.
• These government-backed leases guarantee stable, inflation-resistant returns.

03:04 – 99% Of Cash Flows From UK Government

Elite UK’s concentration on state tenants creates a robust and defensive revenue base.

• Unlike most REITs with a mix of commercial and a few sovereign tenants, Elite UK is almost entirely reliant on the government.
• Main tenant: The Department for Work and Pensions (DWP), making up nearly 90% of the portfolio.
• This focus differentiates Elite UK among Singapore and UK-listed REITs.

04:49 – Impact Of Political Changes In The UK

Political shifts impact strategy but government leases remain stable.

• The recent change to a Labour government underlines a continued focus on social policy and public service delivery.
• Social security and job centres are key to Labour’s platform, supporting demand for Elite UK’s assets.
• Government remains the main tenant, ensuring policy continuity in lease demand.

06:01 – Why Government-Backed Tenants Matter In REITs

Government tenants offer a rare combination of stability, low default risk and counter-cyclicality.

• State tenants don’t default even in recessions.
• Job centres, in fact, see increased traffic and relevance during downturns, helping cash flow resilience.
• British law and tax clarity further underpin property values.

09:19 – Improving Distributions And Reducing Gearing

Elite UK undertook major deleveraging and asset enhancement for shareholders.

• Since May 2023, the REIT has reduced gearing from nearly 50% to above 42%.
• Debt reduction tackled investor concerns and improved the share’s value proposition.
• Refinancing and pre-paying debts lowered interest expenses and supported higher DPU (distribution per unit).
• Sale and conversion of vacant assets add flexibility for further improvement.

13:06 – Entering The Student Accommodation Sector

Elite UK is diversifying by converting certain assets into student accommodation (PBSA).

• This “conversion” is preferred over buying, due to higher cap rates and cost discipline.
• Existing assets in university cities are well-placed for student housing.
• The UK faces a housing shortage, and rental and student housing are high-demand sectors.
• The REIT recently launched its first student housing project in Dundee, Scotland.

17:05 – How Job Centres And Student Housing Complement Each Other

Defensive job centre leases and counter-cyclical student housing deliver diversification.

• During recessions, job centre usage rises; students also pursue more education, driving PBSA demand.
• Combining these assets reduces portfolio risk and provides stable returns across cycles.

20:19 – Why Convert Instead Of Buying PBSA Properties

Conversions offer better economics and asset quality than outright PBSA purchases.

• Buying existing PBSA often means accepting lower yields, given today’s cap rates.
• By converting their own assets, the REIT achieves higher returns without overpaying for properties.
• Careful asset selection and value creation drive the strategy.

22:04 – How Investor Feedback Shaped Strategy

Investor input drove stronger diversification and risk management.

• Expanding into housing and student accommodation broadens income sources and reduces risk.
• Delivery of past year’s promises builds trust; this year’s focus is on lease renewals and asset enhancement.
• Feedback loop helps set priorities each year.

24:00 – Key Priorities: Lease Renewals, Balance Sheet, Conversions

Three main strategic pillars guide Elite UK in FY25.

• Extending government leases, most of which expire in 2028, is the top priority.
• Balance sheet remains a management focus, with further debt reduction targeted.
• Growth and value will be extracted via conversions—particularly expanding student and residential accommodations.

26:30 – Why Blackpool Is A Strategic Data Center Location

Asset management includes unlocking unique property value, like Blackpool’s potential as a data hub.

• A site in Blackpool sits at the landing point of a transatlantic data cable, offering low-latency benefits.
• Plans are underway to convert spare land into a data centre or “accounting centre,” subject to approval.
• This supports value crystallization and future monetization.

27:26 – Josh’s Leadership Insights: Relationships, Humility & Networking

CEO Josh Liaw emphasizes people-centric leadership and strategic networking.

• Strong relationships are vital in finance and real estate.
• Humility and service—down to buying coffee—establish credibility and trust.

• Young professionals are encouraged to build networks and be persistent.

30:00 – Why Now May Be A Good Time To Look At Elite UK REIT

After a challenging period, Elite UK is well-positioned for the next leg of growth.

• Gearing is lower, dividends and distributions are trending higher.
• The conversion and PBSA strategy offers organic growth.
• Lease renewal, asset enhancement and prudent debt management provide a roadmap for FY25 and beyond.

32:00 – Government Credit, High Yield, And A Strong Team

Elite UK offers reliable government-backed income, attractive yields and skilled management.

• Backed almost entirely by UK government credit.
• Dividend yields are meaningfully above market average at around 9%.
• The management team demonstrates strong execution and responsiveness to investor needs.

33:31 – Wrap-Up And Key Takeaways

Elite UK REIT combines defensive assets, income growth, and credible leadership for long-term investors.

• Government tenancies and lease extension strategy underpin stability.
• Asset management and sector diversification position the REIT for resilient growth.
• Investors seeking yield and inflation-hedged income have compelling reasons to consider Elite UK REIT now.

Beansprout provides research coverage on Elite UK REIT under the MAS GEMS programme. Read our reports on Elite UK REIT here:

• Initiation report: Elite UK REIT - Room for positive asset repricing (Sep 2024)
• 1H 2025 earnings update: Elite UK REIT - Higher DPU with increased payout ratio (Aug 2025)

Related Links:

• Elite UK REIT share price history and share price target
• Elite UK REIT dividend history and dividend yield

Check out Beansprout's guide to the best stock trading platforms in Singapore with the latest promotions to invest in Elite UK REIT.

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