Tim Talks Money AMA #5

Whether it's about navigating the latest market events, unpacking a complex financial concept, understanding the various asset classes, or simply sharing practical money tips you can use day-to-day, this is your chance to ask me anything (AMA). 

Below are some questions I’ve received that I thought might be relevant to you:

Why are Singapore REITs suitable for long-term investing?

Singapore REITs are really buy-and-hold, long-term investments. There isn’t a lot of price action in the short term, so if you’re a short-term trader, these might not suit your strategy.

However, they’re great for investors looking for capital appreciation and consistent dividend income over time. While the US Federal Reserve is keeping interest rates “higher for longer” right now, eventually they will come down further.

Of course, right now Singapore REITs and their share prices are really being driven by US monetary policy so that is something all investors should be aware of. Personally, I’m a long-term investor, so my focus is always on holding quality assets for the long haul.

What are your top five Singapore REITs to buy and hold forever?

Here are my top five Singapore REITs, along with their dividend yields and key features:

1. Parkway Life REIT

• Dividend Yield: 3.9%

• Focus: Healthcare

• Portfolio: 64 properties across Singapore, Japan, and Malaysia

• Why It’s a Top Pick:
  Parkway Life REIT is a defensive healthcare-focused REIT. While some investors may find the yield relatively low, it has demonstrated consistent dividend growth and long-term capital appreciation. Its stability and quality portfolio make it an excellent choice for risk-averse investors.

2. Mapletree Industrial Trust

• Dividend Yield: 6.5%

• Focus: Industrial properties and data centres

• Portfolio: 139 properties in Singapore, North America, and, more recently, Japan

• Why It’s a Top Pick:
  This REIT combines industrial properties like flatted factories with a strong focus on data centres in North America. It has a proven long-term track record of growing its distribution per unit (DPU) and delivering solid share price returns.

3. Frasers Centrepoint Trust

• Dividend Yield: 5.6%

• Focus: Retail

• Portfolio: 10 properties, primarily heartland malls in Singapore (e.g., Changi City Point, Causeway Point, Century Square)

• Why It’s a Top Pick:
  This REIT is defensive in nature, with properties located in established suburban areas. Its stability and reliable dividend payouts make it a cornerstone in any income-focused portfolio.

4. Mapletree Logistics Trust

• Dividend Yield: 6.6%

• Focus: Logistics

• Portfolio: 183 properties across Asia-Pacific

• Why It’s a Top Pick:

  This REIT benefits from the structural demand for logistics space in Asia. It is well-diversified and has shown consistent growth in both capital appreciation and DPU over the long term. However, right now its DPU is being dragged down by its China logistics exposure so this is one big risk investors need to monitor.

5. Keppel DC REIT

• Dividend Yield: 4.3%

• Focus: Data centres

• Portfolio: 25 data centres across nine countries in Asia-Pacific and Europe

• Why It’s a Top Pick:
  Keppel DC REIT stands out for its strong track record of capital appreciation and consistent dividend growth. With data centres being a critical infrastructure in the digital economy, this REIT is well-positioned for future growth. Investors should be aware that the distribution yield is relatively low (versus other S-REITs) given its growth-focused nature.

What advice do you have for investors looking to buy REITs?

If you’re considering individual REITs, always do your own due diligence and research. Don’t focus solely on the dividend yield; it’s easy to get caught up in the numbers but (in most cases) high yields can indicate trouble ahead. Instead, prioritise factors like:

• Dividend growth: Is the REIT growing its dividends over time?

• Dividend stability: Can the REIT maintain its payouts in varying market conditions?

• Capital appreciation: Does the REIT show potential for long-term growth in its share price?

These factors are much more important than chasing the highest yield.

Got a question? Submit it here and I’ll try to answer it in a future post.