Singapore REITs faced clear pressure from higher funding costs, which slowed distribution growth across several trusts. As investors begin to price in lower rates, the key question is whether lower interest costs can arrive alongside rental growth.
Refinancing schedules drive near-term pressure
Debt maturity profiles vary widely across REITs. Trusts that have already refinanced a large share of debt at higher rates may see pressure stabilise, while those with low-cost legacy debt maturing soon may still face distribution headwinds.
How investors can screen
Headline distribution yield should not be the only metric. Interest coverage, aggregate leverage, lease expiry profiles and tenant demand determine whether distributions are sustainable.
