With the recent decline in interest rates, REITs are coming to the forefront of investors’ attention, especially those with high yields.
However, this cohort may conceal unknown risks.
Here, we shine the spotlight on three REITs with yields of at least 6.5%: AIMS APAC REIT (AIMS), Capitaland China Trust (CLCT), and United Hampshire US REIT (UHREIT).
AIMS APAC REIT: Singapore Industrial / Logistics Exposure
AIMS APAC REIT (SGX: O5RU) invests in industrial, logistics and business park properties mainly in Singapore.
AIMS reported stable financial results for the first quarter of fiscal year 2026 (1QFY2026): Revenue was flat at S$47.4 million, with net property income declining 1% year on year (YoY) to S$34.1 million.
Distribution per unit (DPU) grew slightly at 0.4% YoY to S$0.0228 per unit for the quarter, a sharp deceleration from FY2025’s 2.6% annual growth, signalling that the REIT’s distribution momentum could be waning.
Portfolio occupancy in 1QFY2026 remains resilient at 93.7%, while rental reversion was a positive 5.4%, a marked slowdown compared to 1QFY2025’s 12.8% gain, suggesting that AIMS is seeing slower growth.
AIMS maintains a conservative aggregate leverage of 28.9% with S$574 million in gross debt, though S$308 million (53.7%) requires refinancing by FY2028.
The REIT has locked in a 4.7% cost of capital for its upcoming perpetual securities redemption in August 2025, positioning it to benefit from potential rate cuts as refinancing approaches.
In short, we could see an annual DPU boost.
With asset enhancement initiatives, including upgrading and refurbishing its properties at Tai Seng Drive and Clementi Loop, AIMs is primed to capitalise on the increasing demand for logistics, driven by e-commerce and third-party logistics providers.
Key risks include concentration in the industrial sector, in particular the logistics and warehouse sector which contributes roughly 50% of gross rental income, and exposure to cyclical tenant demand that typically weakens during economic downturns.
At the current price of $1.35, the REIT offers a trailing yield of around 7.1%.
CapitaLand China Trust: Betting on China’s Recovery
CapitaLand China Trust (SGX: AU8U) operates a diversified portfolio of retail malls, business parks, and logistics properties across China.
The REIT’s latest DPU of S$0.0249 for the first half of 2025 (1H2025) represents a 17.3% YoY decline, continuing a downward trend from a DPU of S$0.0301 for 1H2024 and S$0.0374 for 1H2023.
Despite shrinking distributions, the trust’s yield remains elevated at around 6.6% as its unit price has fallen in tandem.
Portfolio occupancy shows mixed signals: average occupancy was resilient at 93.5% for 1H2025 (compared to 86.2% in 1H2024), with retail properties maintaining strong occupancy at 96.9%, while business parks lag at 86.9% and logistics parks sit at 96.6%.
CLCT carries a relatively high leverage with a gearing ratio of 42.1%, and manages an average cost of debt of 3.42%, while maintaining an interest coverage ratio (ICR) of 2.9 times.
The REIT offers direct exposure to China’s domestic consumption recovery, with retail sales increasing 3.4% YoY in August) and steady growth in logistics (5.8% YoY for 2024).
However, investors face headwinds from persistent weak consumer sentiment in China, RMB-SGD currency fluctuations, and China’s unpredictable policy environment.
At its current price of S$0.78, the REIT trades at a trailing yield of about 6.6%.
United Hampshire US REIT: Defensive US Assets Face Headwinds
United Hampshire US REIT (SGX: ODBU) is a REIT whose portfolio is focused on defensive US properties comprising grocery-anchored shopping centers, and self-storage facilities.
For its latest quarter (1H2025), DPU increased 4% YoY to US$0.0209, marking two consecutive periods of growth.
However, the current payout pales in comparison to 1H2022’s distribution of US$0.0291 per unit and 1H2023’s US$0.0265 per unit, reflecting the impact of higher US interest rates on this leveraged REIT.
At its current price of US$0.50, the REIT has a trailing yield of 8.3%.
Portfolio fundamentals remain robust with 97.2% occupancy for grocery & necessity properties and 95.3% for self-storage facilities.
UHREIT’s portfolio is anchored by a diversified base of high-quality tenants, including leading grocers such as BJs Wholesale Club (NYSE: BJ), Walmart (NYSE: WMT), and Ahold Delhaize (AMS: AD), alongside stable food chains such as Chipotle (NYSE: CMG) and Burger King (NYSE: QSR) – tenants that typically weather economic downturns well.
UREIT maintains a net aggregate leverage of 36.1% with a total debt of US$302.7 million, at a 5.13% average cost.
The REIT faces near-term refinancing pressure with an average debt maturity of 1.9 years, though its net asset base of US$442.6 million provides some buffer.
The main risks for UREIT include its modest size (US$798.8 million in assets), the USD-SGD currency exposure, and the looming refinancing requirements.
Common Themes and Red Flags
These three REITs share a common threat – yields above 6.5% that signal either opportunity or distress.
High yields often mask underlying challenges.
Investors should assess key factors, such as the sustainability of distributions, debt refinancing risks, and earnings resilience before determining if these REITs are bargains or value traps.
Get Smart: Bargain or Trap?
Each REIT offers distinct risk-reward profiles.
AIMS provides exposure to Singapore’s logistics sector with conservative leverage, though investors must contend with cyclical industrial demand.
CLCT offers a direct bet on China’s consumption recovery, but faces persistent headwinds from weak consumer sentiment and currency volatility.
Finally, UREIT appears the most defensive with its essential retail and self-storage assets, yet its near-term refinancing needs and USD exposure pose challenges.
The verdict? These aren’t straightforward bargains.
While their high yields compensate for specific risks, investors seeking sustainable income should weigh whether these risks align with their portfolio objectives.
Focus on distribution sustainability and balance sheet strength rather than chasing yield alone.
If you’re nervous, confused, or worried about buying your first stock, then our latest beginner’s guide to investing can help. It’s easy to read yet packed with valuable insights. Download it for free today, and buy your first stock in the next few hours. Click here to get started.
Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses!
Disclosure: Wesley does not own shares in any of the companies mentioned.
