The conversation begins with Elite UK REIT's inclusion under the CPF Investment Scheme and what that means for CPF investors.
Kenny Loh, REIT Specialist and Wealth Advisory Director, examines whether yields, lower interest rate expectations and valuations are creating a compelling opportunity.
We also examine why industrial REITs continue to demonstrate resilience and the return of acquisition activity across the REIT sector.
[0:19 – 2:29] Elite UK REIT Joins CPFIS: Why This Matters
Elite UK REIT was recently added to the CPF Investment Scheme (CPFIS), allowing investors to use CPF Ordinary Account (OA) savings to purchase units.
The inclusion is significant because Elite UK REIT is one of the few Singapore-listed REITs providing exposure to UK government-backed properties while being eligible for CPF investments.
Key highlights:
- CPF OA funds can now be used to invest
- UK government-linked tenant base
- High distribution yield
- Improved balance sheet metrics
[2:29 – 5:41] Why Was Elite UK REIT Included?
According to Kenny Loh, several factors likely contributed to its inclusion:
Defensive Tenant Profile
- Rent collection close to 100%
- Rental payments backed largely by UK government agencies
- Mission-critical social infrastructure assets
Improved Financial Position
- Net gearing reduced to approximately 37.3%
- Previously operated above 40% gearing levels
- Improved financial flexibility
Attractive Valuation
- Approximately 9% distribution yield
- Around 24% discount to book value
- Strong income visibility
[4:59 – 7:48] Investor FAQ: What's The Catch?
A 9% yield always raises an important question:
Q: Why is the yield so high?
A: Investors are demanding compensation for several risks:
- GBP/SGD currency fluctuations
- UK property market exposure
- UK sovereign and economic risks
Q: If CPF allows me to buy it, is it safe?
A: No.
CPFIS eligibility does not remove:
- Market risk
- Dividend risk
- Capital loss risk
One of the key reminders from the discussion was that CPF-approved investments can still perform poorly if operating conditions deteriorate.
[7:49 – 10:00] Why Are Investors Flooding Back Into S-REITs?
Retail investors have reportedly invested approximately S$925 million into S-REITs in 2026.
The primary driver is yield.
Comparison:
| Asset | Approximate Yield |
|---|---|
| 6-Month T-Bill | ~1.5% |
| Singapore Savings Bond | ~1.5–2.1% |
| S-REITs | 5–9% |
As cash yields decline, REITs have become attractive again for income-focused investors.
[10:00 – 12:36] Which REITs Are Attracting Investor Attention?
Several industrial and logistics-focused REITs were highlighted:
- CapitaLand Ascendas REIT
- Mapletree Industrial Trust
- Daiwa House Logistics Trust
- Elite UK REIT
Common characteristics:
- Trading near multi-year valuation lows
- Attractive dividend yields
- Stable occupancy rates
- Long lease profiles
[12:36 – 14:35] Acquisition Activity Is Returning
One major theme discussed was the return of acquisitions as a growth driver.
Notable transactions mentioned include:
- CICT's acquisition activity
- CLAR's Osaka data centre expansion
- Lendlease Global REIT's PLQ acquisition
- OUE REIT's Sydney office acquisition
The objective is clear:
Grow asset bases to support future DPU growth despite elevated interest rates.
[14:36 – 18:34] The K-Shaped Recovery In REITs
One of the most important insights from the interview was Kenny's description of a "K-shaped recovery."
Winners
Large-cap and sponsor-backed REITs:
- Data centres
- Logistics assets
- Strong balance sheets
- Acquisition capability
Losers
Smaller REITs with:
- High leverage
- Refinancing pressure
- Limited growth opportunities
The takeaway:
Not all REITs will recover together.
Stock selection is becoming increasingly important.
[17:40 – 18:30] What About Suburban Retail REITs?
Suburban retail was previously considered one of the more defensive REIT subsectors.
Kenny remains positive on the stability of names like Frasers Centrepoint Trust but noted:
- Share prices have largely moved sideways
- Industrial and data-centre related REITs currently offer stronger opportunities
[18:34 – 20:17] Biggest Risk Facing S-REITs Today
The key risk remains US interest rates.
If rates stay elevated:
- Refinancing costs remain high
- DPU growth becomes more difficult
- Institutional money may continue to stay on the sidelines
Current valuations appear attractive, but a significant recovery may require a clearer interest-rate easing cycle.
[20:17 – 22:10] Investor FAQ: Should You Increase REIT Exposure Now?
Q: Is now a good time to build a REIT portfolio?
A: Potentially yes, but selectively.
Investors should focus on:
- Strong balance sheets
- Healthy debt maturity profiles
- Sustainable dividend growth
- Quality assets
Q: How much of a portfolio should be allocated to REITs?
A: Kenny suggested avoiding over-concentration, with REIT exposure generally not exceeding around 30% of a diversified portfolio.
Bottom Line [Entire Discussion]
Elite UK REIT's CPFIS inclusion is a positive development, but CPF approval should not be mistaken for a guarantee of safety.
The broader S-REIT market appears attractively valued, particularly within industrial, logistics and data-centre sectors. However, investors should remain selective as the market enters a K-shaped recovery where stronger REITs continue to pull ahead while weaker REITs struggle with refinancing and growth challenges.