When it comes to dividend investing, the “why” is usually far more important than the “how much.”
This March, three Singapore-listed REITs are about to hit your bank accounts with distributions, but their stories couldn’t be more different.
On paper, one is rising, one is holding steady, and one is dipping.
However, if you look under the hood, the sustainability of these payouts might actually surprise you.
Elite UK REIT (SGX: MXNU)
Elite UK REIT is a bit of a specialist, owning 148 mostly freehold commercial properties across the United Kingdom.
Its fortunes are closely tied to the British government, specifically the Department for Work and Pensions (DWP), which accounts for over 90% of its rent.
For the 2025 financial year (FY2025), it was the standout performer, delivering a distribution per unit (DPU) of £0.0303 – a 5.6% jump that should have unitholders feeling quite cheerful.
But here’s the interesting part: this growth didn’t actually come from a massive surge in rent.
In fact, net property income (NPI) dipped slightly because of lower dilapidation settlements and expenses related to asset repositioning.
The higher payout was actually driven by savvy capital management and tax benefits.
The real “win” for long-term investors, however, is a massive lease renewal with the DWP.
By locking in its anchor tenant for longer, the REIT extended its portfolio lease expiry from a nail-biting 2.4 years to a much more comfortable 7.2 years.
With inflation-linked rent reviews kicking in by 2028, Elite has turned a major uncertainty into a very predictable income stream.
Digital Core REIT (SGX: DCRU)
If you only looked at the dividend cheque, you might think Digital Core REIT had a quiet year.
Despite gross revenue skyrocketing by over 72% to US$176.2 million, the DPU remained flat at US$0.0360.
You might be wondering where all that extra cash went.
The answer is that the manager is reinvesting heavily for the future.
The REIT spent US$87 million to increase its stake in an Osaka data centre and successfully filled up space at its Northern Virginia facility at a massive 35% premium over previous rents.
A flat DPU in the face of surging revenue isn’t a red flag here; it’s a sign of a REIT building a bigger engine.
The underlying signals are incredibly healthy, with rental rates trending up and a rock-solid balance sheet.
With leverage sitting at a conservative 37.1% and plenty of “dry powder” for new acquisitions, Digital Core REIT looks like it’s prioritizing long-term growth over a quick dividend bump today.
For the patient investor, this suggests a very high quality of earnings.
First REIT (SGX: AW9U)
First REIT, which focuses on healthcare assets across Indonesia, Japan, and Singapore, had a tougher time on the headline front.
Its DPU fell by 8.1% to S$0.02170. Now, a falling dividend usually sets off alarm bells, but the culprit here wasn’t empty hospitals.
Instead, the REIT was hit hard by the strengthening Singapore Dollar, which ate away at the value of the rent collected in Indonesian Rupiah and Japanese Yen.
If you strip away the currency headaches, the actual business is doing fine.
Occupancy is a perfect 100%, and the average lease term is a decade long.
However, there are two things to keep an eye on.
Gearing has edged up to 42.1%, and there is a significant amount of debt that needs to be refinanced this year.
The manager is currently talking to lenders and exploring all options, including potential partnerships, to keep the ship steady.
While the hospitals are busy and the cash flow is stable, the financial plumbing needs a bit of maintenance in 2026.
Get Smart: Follow the Drivers, Not Just the DPU
A rising DPU, a flat DPU, and a falling DPU – yet the reality is more nuanced than the headlines suggest.
Elite UK REIT grew its payout through smart financing and long-term lease renewals, while Digital Core REIT is choosing to reinvest its massive gains for future growth.
First REIT’s decline is more about currency swings than a broken business, though its debt levels deserve a watchful eye.
The lesson for us is simple: don’t just chase the highest yield.
Understanding what’s actually powering the dividend is the secret to building a truly resilient portfolio.
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Disclosure: Calvina Lee does not own any of the stocks mentioned. Chin Hui Leong contributed to the article and does not own any of the stocks mentioned.
