Why is A REIT’s gearing ratio important? The gearing ratio for a REIT is an important indicator as to how healthy it is. Higher gearing ratios mean that the REIT is paying banks and bondholders a higher amount of interest expense, and that would mean a lesser amount of money available for distribution to you as investors. If there’s one thing to take away from this post, a lower percentage of gearing is always better than a higher one. Two reasons for this Interest expense is likely lower, resulting in a higher net property income margin These REITs have more debt headroom for future acquisitions compared to other REITs that have a gearing level closer to SGX’s 45% limit. Average gearing ratio for Singapore REITs Across the Singapore REIT market, the average gearing level is 34.6%. It differs across various sectors, with office REITs having on average the highest amount ......