In recent years, interest rates have weighed on Singapore REITs (S-REITs), putting a squeeze on distributions while financing costs climbed. As a result, many companies responded by strengthening their balance sheets instead of chasing growth. But with rates stabilising and refinancing risks easing, conditions are starting to look up. With a possible REIT revival on the horizon, we look at which ones are positioned for higher DPUs (distributions per unit).

A Turning Point for REITs?

Lower or slowing interest rates can play a critical role in shaping REIT performance. By reducing borrowing costs, rate cuts can enhance property values, lower financing expenses, and strengthen dividend-paying business models. Occupancy rates have remained high across most property segments, with rental reversions staying generally positive. Meanwhile, valuations remain well below historical peaks, despite signs that fundamentals are steadying. The headwinds that held REITs back in recent years may now be losing strength.

What Drives DPU Growth in a Recovering REIT Cycle

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