In a high-interest-rate environment, many REITs have experienced declines in their distribution per unit (DPU) on a yearly basis.
However, the most resilient ones not only manage to consistently increase their DPU, but they do so while maintaining low gearing ratios.
These REITs also boast healthy interest coverage ratios (ICR), supporting stable distributions.
Today, we will highlight three REITs that stand out due to their financial strength and steady payouts: Parkway Life REIT, Keppel DC REIT, and Frasers Centrepoint Trust.
Parkway Life REIT: Defensive REIT Offering Healthcare Exposure
One of Singapore's most defensive REITs, Parkway Life REIT (SGX: C2PU), also known as Parkway, is notable for its portfolio of healthcare assets and long-term master leases.
Parkway Life owns 75 healthcare properties, valued at S$2.46 billion.
Hospitals and medical centres make up more than 65% of the portfolio's value, with nursing homes comprising the rest.
For the first half of 2025 (1H2025), Parkway Life increased its DPU by 1.5% year-on-year to S$0.0765 per share.
This was supported by strong distributable income (DI) performance, which rose to S$49.9 million, up 9.5% YoY.
Parkway's balance sheet is exceptional, with a net asset value per share of S$2.44 and a current gearing ratio of 35.4%, one of the lowest in the sector.
The REIT has an impressive ICR of 9.1 times, indicating its strong ability to cover interest expenses.
Parkway also boasts a weighted average lease expiry (WALE) by gross revenue of nearly 15 years.
This long-term lease structure, combined with inflation-based escalations, enables Parkway to steadily and predictably grow its DI and DPU.
Since its listing in 2007, DPU has grown at a compounded annual growth rate (CAGR) of 5.2%, reaching S$0.1492 for the full year ended 2024.
The main takeaway is that Parkway Life is a rare REIT that reliably grows its distribution, has inflation-linked rents, and operates with low leverage.
Keppel DC REIT: Leading Data Centre REIT
Keppel DC REIT (SGX: AJBU), commonly referred to as Keppel, is a pure-play data centre REIT benefiting from strong digitalisation and AI demand trends.
Keppel maintains a disciplined capital structure while investing for growth.
For its latest update (9M2025), Keppel increased its DPU by 8.8% YoY to S$0.767 per share.
DI surged 55.5% YoY, driven by higher contributions from contract renewals, escalations, and new acquisitions.
The portfolio's occupancy rate is robust at 95.8%, with major contract renewals completed for the year.
More than 50% of Keppel's contracts include rental escalations tied to fixed rates and inflation increases.
This strong performance was achieved with disciplined cost management.
Aggregate leverage slightly decreased to 29.8%, with WALE by lettable area at 6.7 years.
Keppel’s ICR is a comfortable 6.6 times.
71% of Keppel’s total debt is due for refinancing from 2026 to 2028, with 74% of borrowings at fixed rates, potentially benefiting from lower refinancing rates.
Since bottoming in 2024, Keppel's DPU has been steadily increasing, expected to continue with the integration of its new data centre acquisition in Japan, which is DPU-accretive.
The key takeaway is that Keppel DC provides stable, growing distributions while leveraging long-term digitalisation trends with low leverage.
Capitaland Integrated Commercial Trust: Singapore’s Largest REIT
Capitaland Integrated Commercial Trust (SGX: C38U), or CICT, offers investors a diversified exposure to some of Singapore’s premier properties across retail, office, and integrated development sectors.
For the first nine months of 2025 (9M2025), the REIT's net property income grew by 1.4% YoY to S$874.2 million.
This increase was driven by improved performance from existing properties and contributions from its retail and integrated development portfolios.
CICT's portfolio is nearly fully occupied, with an overall occupancy rate of 97.2% as of 30 September 2025.
Tenant renewal is robust, with 80% and 74% of retail and office tenants renewing their leases year-to-date, respectively.
Additionally, CICT achieved positive rental reversions of 7.8% and 6.5% YoY for its retail and office properties, respectively.
CICT maintains a strong balance sheet with an aggregate leverage ratio of just 39.2% and a portfolio WALE of 3.2 years.
The REIT's ICR stands at a stable 3.5 times, with 74% of its borrowings at fixed rates.
With a well-spread debt maturity profile from 2026 to 2035, CICT could benefit from refinancing at lower rates.
CICT's strong rental recovery, coupled with lower interest costs, allowed the REIT to increase its DPU by 3.5% YoY to S$0.0562 per share for 1H2025.
This continues the REIT’s trend of annual DPU increases since COVID.
The key takeaway is that CICT offers investors secure, growing distributions supported by top-tier properties in Singapore.
What This Means for Investors
All three REITs show positive momentum in growing their distributable income and distributions to shareholders. Their strong balance sheets mitigate refinancing risks.
Their ability to sustain distribution payouts during challenging market cycles is also attributable to their low-leverage, healthy balance sheets.
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