A number of real estate investment trusts (REITs) have experienced strong rallies over the past year, but that does not mean all of them are fully valued.
Some high-yielding names continue to trade below their book value which could be attractive at these levels.
Let’s examine four REITs to find out if they present value opportunities or are value traps.
CapitaLand Ascott Trust (SGX: HMN)
CapitaLand Ascott Trust, or CLAS, is one of Asia-Pacific’s largest hospitality trusts.
As of the third quarter of 2025 (Q3 2025), the REIT holds a diversified mix of more than 100 serviced residences, hotels, rental housing, and student accommodation assets across 45 cities.
In the first half of 2025 (H1 2025), CLAS’s revenue grew 3% year-on-year (YoY) to S$398.5 million, with the core distribution remaining stable at S$91.6 million. The distribution per unit (DPU) of S$0.02526 is a slight decline of 1% compared to the previous year.
In Q3 2025, the occupancy rate for CLAS improved from 79% a year ago to 83%. The lodging operator also saw revenue per available room (RevPar) improve 3% year-on-year to S$163, highlighting supportive travel demand.
Gearing ratio is healthy at 39.3%, while the interest coverage ratio (ICR) remains adequate at 3.1.
At S$0.93, CLAS’s share price is near a 52-week high.
However, the REIT is trading only at a price-to-book (P/B) ratio of 0.82, while offering a trailing distribution yield of 6.5%.
Given the global diversification of its assets and strong sponsor support via CapitaLand (SGX: 9CI), CLAS is interesting at these levels.
Main risks for the hospitality REIT include its exposure to travel, which can be sensitive to global economic conditions, and foreign exchange (FX) fluctuations.
CLAS represents a balanced mix of recovery and yield. It is a solid option for investors looking to have an exposure to hospitality and the growth of travel.
Stoneweg Europe Stapled REIT (SGX: SET)
Stoneweg Europe Stapled REIT, or SERT, is a rare REIT listed in Singapore that focuses on European real estate.
SERT has a portfolio of data centers, and logistics, light industrial, and office properties across a number of European markets including Denmark, France, Germany, Italy, the Netherlands, and the United Kingdom. The REIT plans to increase the weighting of logistics / light industrial / data centre properties in its portfolio from 59% today to 70% in 2027.
In its 2025 third-quarter update (Q3 2025), the REIT reported solid results. It has a portfolio occupancy rate of 93.5%, while experiencing rental reversion of 7.6% YoY for the quarter.
Net property income (NPI) for the first nine months of 2025 rose 3.0% YoY to S$102.9 million.
SERT’s latest DPU of €0.06553, for the first half of 2025, was down 7% from a year ago mainly because of higher interest costs.
The REIT has gearing of 42.1% as of Q3 2025, which is on the higher end. But its ICR is fine at 3.1.
At €1.56 per share, SERT offers a trailing distribution yield of 8.7% and has a PB ratio of 0.78, which is a steep discount. This share price is also near a 52-week low.
SERT provides investors with diversification outside of Asia with European properties.
A slowdown in the European economy and the REIT’s small scale relative to peers, are risks to be mindful of.
Another risk, which is important for Singapore-based investors, is FX volatility.
Given limited local coverage by the financial community, which might depress its valuation, SERT provides an option for investors seeking high income at deep value from outside Asia.
Starhill Global REIT (SGX: P40U)
Starhill Global REIT, or Starhill, owns prime retail and office properties in Singapore, Malaysia, Australia, Japan, and China.
Some of its more noteworthy properties include Ngee Ann City and Wisma Atria that are in Singapore’s famous Orchard Road shopping belt.
In the first quarter of its fiscal year ending 30 June 2026 (Q1 FY25/26), Starhill recorded a slight YoY increase of 0.2% in NPI to S$37.9 million.
Stronger contributions from its Singapore and Malaysia retail properties were offset by loss of income from divested units and fluctuations in the Australian dollar against the US dollar.
Starhill’s overall occupancy rate is acceptable at 94.8%.
The REIT has a low gearing ratio of 36.7% as of 30 September 2025 and its ICR is adequate at 2.9.
Starhill’s most recent DPU of S$0.0185, for H2 FY24/25, was the same as the prior year’s distribution.
Starhill’s share price of S$0.575, despite being near a 52-week high, gives the REIT a low P/B ratio of 0.81 based on its NAV (net asset value) per unit as of 30 June 2025. It also gives the REIT a trailing distribution yield of 6.3%.
Starhill’s iconic properties in Orchard, the support of YTL Corporation Bhd (KLSE: YTL) as sponsor, and rising footfall as travel rebounds in Singapore, are things to like about the REIT.
However, any decline in retail spending is a risk that could impair the REIT’s growth.
Starhill offers a high yield and trades at a discount to its NAV, which could narrow if travel-driven footfall stays strong.
OUE Commercial REIT (SGX: TS0U)
OUE Commercial REIT, or OUE, owns a mix of offices, malls, and hotels in Singapore. Its flagship assets include OUE Bayfront, One Raffles Place, and Crowne Plaza Changi Airport.
OUE’s revenue for the third quarter of 2025 (Q3 2025) was S$70.5 million and was up 1.2% YoY after adjusting for the December 2024 sale of Lippo Plaza Shanghai.
The REIT’s NPI was S$57.0 million and its adjusted-growth was faster at 2% YoY.
This performance was because of steady performances from the REIT’s assets.
OUE’s latest DPU of S$0.0098, for the first half of 2025, was a 5.4% increase compared to the prior year.
The REIT’s leverage ratio of 40.9% can be considered high, and its ICR is also weak at just 2.3.
But the REIT has a low valuation.
The share price of S$0.35, despite being near a 52-week high, gives the REIT a P/B ratio of just 0.61 and a trailing distribution yield of 6%.
OUE represents an attractive option given the quality of its assets in prime locations. Positive rental reversions across both its office and retail portfolio (9.3% and 5.6%, respectively, in Q3 2025) bodes well for its fundamentals.
Its hospitality assets could also see a rebound in earnings should tourist arrivals continue growing.
But OUE’s leverage and low ICR are concerns, especially if the REIT is unable to refinance its maturing debt at similar or lower interest rates.
OUE could really close the discount on its valuation if it sustains its operating performance and refinances at lower rates.
Get Smart: Consider Riding These REITs for Income and Potential Capital Appreciation
Discounted REITs can offer both income and capital appreciation potential; however, one must discern if the REIT is a value opportunity or a value trap.
CapitaLand Ascott Trust and Starhill Global could benefit from the tourism recovery theme in Singapore.
OUE Commercial REIT offers prime-city exposure at a deep discount.
Stoneweg Europe REIT adds European diversification and provides a high yield.
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Disclosure: Wilson does not own shares in any of the companies mentioned.
