In a high-interest-rate environment, many REITs have seen their distribution per unit (DPU) decline on an annual basis.
However, the strongest ones have not only managed to increase their DPU consistently, but they do so while keeping their gearing ratios low.
They also have healthy interest coverage ratios (ICR), supporting consistent distributions.
Today, we will shine the spotlight on three REITs that stand out due to their financial strength and consistent payout: Parkway Life REIT, Keppel DC REIT, and Frasers Centrepoint Trust.
Parkway Life REIT: Defensive REIT Providing Healthcare Exposure
One of Singapore’s most defensive REITs, Parkway Life REIT (SGX: C2PU), or Parkway, stands out with its portfolio of healthcare assets and long-term master leases.
Parkway Life owns 75 healthcare properties, last valued at S$2.46 billion.
The majority (more than 65% of asset value) of these properties are hospitals and medical centres, with nursing homes rounding off the portfolio.
For the first half of 2025 (1H2025), Parkway Life raised its DPU by 1.5% year-on-year (YoY) to S$0.0765 per share.
This is on the back of strong distributable income (DI) performance, coming in at S$49.9 million, up 9.5% YoY.
Parkway has a pristine balance sheet, with a net asset value per share of S$2.44. Its current gearing ratio of 35.4% is among the lowest in the REIT sector.
Interest coverage ratio (ICR) stands at an astounding 9.1 times, highlighting the REIT’s ability to comfortably meet interest expenses.
The REIT has a healthy weighted average lease expiry (WALE) by gross revenue of nearly 15 years.
This long-term lease structure, combined with inflation-based built-in escalations, allows Parkway to sustainably and predictably grow its DI and DPU over the years.
Since its listing in 2007, DPU has grown at a compounded annual growth rate (CAGR) of 5.2% to S$0.1492 for the full year ended 2024.
The main takeaway is that Parkway Life is a rare REIT that reliably grows distribution, has inflation-linked rents, and operates with low leverage.
Keppel DC REIT: Best-In-Class Data Centre REIT
Keppel DC REIT (SGX: AJBU), or Keppel, is a pure-play data centre REIT whose operating performance is inflecting due to strong digitalisation and AI demand trends.
What’s impressive about Keppel is that it manages to maintain a disciplined capital structure while investing for growth.
For its latest update (9M2025), Keppel raised its DPU by 8.8% YoY to S$0.767 per share.
DI soared 55.5% YoY on the back of higher contributions from contract renewals and escalations, as well as new acquisitions.
The occupancy rate for its portfolio stands strong at 95.8%, with major contracts due for renewal already completed for the year.
A majority of Keppel’s contracts (more than 50%) have built-in rental escalations tied to fixed rates and inflation increases.
Keppel’s robust operating performance was accomplished with disciplined cost management.
Aggregate leverage declined slightly to 29.8%. WALE by lettable area stands at 6.7 years.
The REIT’s ICR stands at a comfortable 6.6 times.
Keppel has 71% of total debt due for refinancing from 2026 to 2028 as of 30 June 2025.
With 74% of its total borrowings denoted in fixed rates, Keppel might benefit from refinancing at lower rates.
Since bottoming in 2024, DPU for Keppel has been steadily increasing.
This trend is expected to continue, given the upcoming 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 surfing long-term digitalisation trends at a low leverage.
Capitaland Integrated Commercial Trust: Singapore’s Largest REIT
Capitaland Integrated Commercial Trust (SGX: C38U), CICT, offers investors a diversified exposure to some of Singapore’s best properties across retail, office, and integrated development segments.
For the first nine months of 2025 (9M2025), the REIT’s net property income growth of 1.4% YoY, on a like-for-like basis, to S$874.2 million.
The gain was supported by improved performance from existing properties and contributions from its retail and integrated development portfolios.
CICT’s real estate properties are mostly full, with the overall occupancy rate across its portfolio standing at 97.2% as of 30 September 2025.
Tenant renewal is healthy with 80.0% and 74.0% of tenants renewing for its retail and office properties, on a year-to-date (YTD) basis, respectively.
The REIT also showed its ability to raise rentals; positive rental reversions of 7.8% and 6.5% YoY, on a YTD basis, were achieved for its retail and office properties.
CICT has a fortress balance sheet, with an aggregate leverage ratio of only 39.2%. It also has a portfolio WALE of 3.2 years.
The REIT’s ICR stands at a stable 3.5 times.
CICT has 74% of its total borrowings denoted in 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, alongside lower interest costs, allowed the REIT to increase its DPU by 3.5% YoY to S$0.0562 per share for the first half of 2025.
This maintains the REIT’s streak of annual increases in its DPU since COVID.
The key takeaway is that CICT offers investors safe, growing distributions anchored by some of Singapore’s best properties.
What This Means for Investors
All three REITs highlight positive momentum in growing their distributable income and distributions to shareholders. Their strong balance sheets allay refinancing risks.
Their ability to sustain distribution payout through tough market cycles is also due to their low-leverage, healthy balance sheets.
Get Smart: Quality Over Yield
In today’s environment, balance sheet strength is the real differentiator.
Parkway Life, Keppel DC, and Capitaland Integrated Commercial Trust prove that you can grow shareholder distributions while maintaining cost discipline.
Smart Investors know that quality, solid fundamentals, are preferred over high yield — in essence income stability matters more.
They will also help you through tough markets.
This could be the fastest way to jump from a “newbie” investor to a seasoned pro. Our beginner’s guide shows everything you need to know to buy your first stock and beyond. Click here to download it for free today.
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Disclosure: Wesley owns shares in Keppel DC REIT.
