Singapore REITs Sector - Distribution growth from lower interest rates in 3Q25

Lower interest rates supporting higher distribution

We continue to see how falling interest rates visibly improved Singapore REITs performance this quarter. 

A number of Singapore REITs reported lower average debt costs and guided how a 25–50 bps decline in rates could translate into higher distributable income. 

The ability to issue long-dated debt at tighter spreads signalled that capital market conditions have improved, supporting stronger earnings sustainability heading into 2026.

Steady portfolio performance among industrial REITs

AIMS APAC REIT delivered steady income growth, and Daiwa House Logistics Trust recorded higher net property income (NPI) despite currency drag. 

Digital Core REIT remained almost fully occupied and benefited from lower interest costs even as refurbishment works limited near-term growth.

Stable domestic strength

OUE REIT delivered steady results, supported by resilient retail footfall, firm CBD office leasing, rising passing rents and lower funding costs from proactive refinancing. 

Singapore retail and office assets continued to outperform overseas markets, with suburban malls seeing healthy reversions and Grade A offices maintaining strong demand, positioning these REITs as clear beneficiaries of a lower-rate environment.

Singapore REITs with overseas assets were a mixed bag

Currency depreciation—in particular the JPY and IDR—meant that stronger local-currency rentals did not fully translate into SGD-reported income for REITs such as Daiwa House Logistics Trust and First REIT. 

By contrast, Elite UK REIT showed the benefit of long government-backed leases, allowing it to grow DPU even in a softer macro environment. 

Capitaland China Trust (CLCT) showed signs of stabilisation with stronger retail and logistics performance, while 

Capitaland India Trust (CLINT) remained one of the strongest performers with 10% NPI growth and successful divestments.

Acquisition activity picking up

Over the last four months, REIT managers turned more active. CapitaLand Integrated Commercial Trust (CICT) moved to acquire the rest of CapitaSpring, Capitaland Ascendas REIT (CLAR) completed several higher-spec industrial and logistics acquisitions, and AIMS APAC REIT secured the Framework Building. 

Keppel DC REIT acquired Tokyo Data Centre 3, Keppel Infrastructure Trust expanded into subsea cables with Global Marine Group, and Keppel REIT added Sydney’s Top Ryde City to diversify income.

Preference for REITs with ability to grow distributions

We see scope for Singapore REITs to benefit from a lower interest rate environment. 

Within the sector, we favour REITs that can sustain and grow distributions through active portfolio management, such as asset enhancements, selective acquisitions, or rental reversion opportunities.

Amongst mid-cap REITs, our preference is for Elite UK REIT, CapitaLand India Trust and Digital Core REIT. 

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