Overly eager investors may find themselves drawn to high-yield stocks like moths to a flame.
The logic is seductive: a 7%-plus yield handily beats what blue-chip REITs offer, so why not reach for more?
The answer lies beneath the headline number.
A juicy yield can signal genuine value—or serve as a warning sign of underlying stress.
Singapore’s small-cap REIT universe, with market capitalisations of S$1 billion or lower, includes a few trusts offering yields north of 7%.
These aren’t household names, but some boast occupancy rates above 95% and exposure to structural growth trends.
Here are three small-cap REITs worth another look.
Digital Core REIT (SGX: DCRU)
Digital Core REIT owns 11 freehold data centres across the United States, Canada, Germany, and Japan, with US$1.7 billion in assets under management as at 31 December 2024.
At US$0.50, shares offer a 7.3% dividend yield.
For the first nine months of 2025 (9M2025), the REIT delivered resilient results driven by portfolio expansion.
Gross revenue surged 83.9% year-on-year (YoY) to US$132.4 million, while net property income (NPI) rose 49.6% YoY to US$67.7 million.
However, distributable income grew just 1.9% YoY to US$35.2 million, reflecting higher finance costs from recent acquisitions.
This disconnect between top-line growth and what flows through to unitholders bears watching.
Portfolio occupancy remained firm at 98% for in-service properties as of 30 September 2025, unchanged from the previous quarter.
The REIT benefited from robust data centre fundamentals, with artificial intelligence (AI) workloads driving exceptional demand.
Northern Virginia vacancy rates hit record lows of 0.3%, while wholesale pricing reached US$225 per kilowatt monthly in 2025, up from US$210 a year ago.
On the acquisition front, Digital Core REIT purchased an additional 20% stake in Digital Osaka 3 on 26 March 2025 for around US$86.7 million.
The REIT is also redeveloping 8217 Linton Hall in Northern Virginia.
Management has been active with unit buybacks, repurchasing 1.8 million units year-to-date at an average price of US$0.565, generating a 0.1% distribution per unit (DPU) accretion.
Trading at a 36% discount to net asset value today, Digital Core REIT maintains an aggregate leverage of 38.5% with US$431 million in debt headroom.
United Hampshire US REIT (SGX: ODBU)
United Hampshire US REIT (UHREIT) owns a portfolio of 20 grocery-anchored and necessity-based retail properties along with two self-storage facilities across eight US states, with assets under management of US$731.7 million.
At US$0.50, the REIT offers an 8.3% dividend yield.
UHREIT reported mixed financial results for the third quarter of 2025 (3Q2025).
Gross revenue rose 1.4% YoY to US$18.1 million, while NPI increased 5.7% YoY to US$12.7 million.
However, for 9M2025, gross revenue fell 1.6% YoY to US$53.8 million and NPI declined 1.9% YoY to US$36.7 million, primarily due to the absence of rental contributions from three divested properties.
Here’s where things get interesting.
Despite the revenue decline, distributable income surged 15.5% YoY to US$7 million in 3Q2025.
The improved figure was driven by reduced finance costs resulting from lower interest rates, along with lower borrowings following its strategic divestments.
The REIT’s DPU for 1H2025 rose 4% YoY to US$0.0209, taking its annualised DPU to US$0.0418.
UHREIT maintained solid operational metrics with committed occupancy of 97.2% for grocery properties and 94.9% for self-storage facilities.
On portfolio management, UHREIT divested Albany-Supermarket in January 2025 for US$23.8 million, 4.2% above purchase price, and acquired Dover Marketplace in Pennsylvania for US$16.4 million in August 2025, which is expected to increase DPU by 2%.
The REIT is also constructing a new 5,000 square foot store pre-leased to Florida Blue for 10 years.
Elite UK REIT (SGX: MXNU)
Elite UK REIT owns 148 properties valued at £419.7 million as of 30 September 2025, with 99.1% of rental income backed by UK government tenants.
At £0.36, units provide an 8.5% dividend yield.
For the first nine months of 2025 (9M2025), Elite UK REIT reported revenue of £28.3 million, edging up 1% YoY.
NPI dipped 0.5% YoY to £27.4 million, reflecting expenses incurred for asset repositioning initiatives.
Here’s what matters for income investors.
Despite the modest top-line growth, distributable income rose 6.2% YoY to £14.8 million. This translated to a DPU of £0.023, up 9.4% from £0.021 a year ago.
The improved distributable income came from interest savings through capital management and interest rate optimisation, alongside tax benefits from sustainability-related capital expenditure.
The REIT’s borrowing costs stood at 4.8% as at 30 September 2025, with 85% of debt on fixed rates.
On the acquisition front, Elite UK REIT purchased three government-leased properties for £9.2 million, namely Tŷ Merlin in Carmarthen, Custom House in Felixstowe, and Priory Court in Dover.
The acquisitions added the Department for Environment, Food & Rural Affairs as a new tenant, delivering 0.6% DPU accretion while reducing gearing by 20 basis points.
Beyond acquisitions, the REIT is progressing several repositioning initiatives to unlock value.
Planning approval was secured for Lindsay House in Dundee’s conversion to 168-bed purpose-built student accommodation, with estimated completion in academic year 2027.
The project targets a five-fold valuation uplift from the current £1.5 million valuation.
Pre-planning consultation concluded positively for Cambria House in Cardiff, targeting 348 beds within a one-minute walk of Cardiff University.
The REIT has also submitted planning applications for Peel Park in Blackpool, securing 120 MVA power supply for a hyperscale data centre development valued at £32.8 million.
The key near-term priority is lease management.
Elite UK REIT is working to complete partial Department for Work & Pensions lease regears for 2028 maturities by the first quarter of 2026 (1Q2026), addressing £352.1 million of the portfolio.
The strategy aims to diversify the lease expiry profile and extend leases ahead of maturities, ensuring income visibility while the repositioning projects progress towards completion.
Get Smart: Look beyond the yield
High yields can be a blessing or a trap—the difference lies in what’s driving the number.
Digital Core REIT’s 7.3% yield stems partly from its 36% NAV discount, though acquisition financing is eating into distributable income growth.
UHREIT’s 8.3% yield benefits from falling interest rates.
Elite UK REIT’s 8.5% yield hinges on successfully extending government leases before 2028 maturities.
All three share common small-cap traits: thinner liquidity, and foreign currency exposure.
For those willing to accept these trade-offs, high occupancy and active management offer a compelling case.
Just ensure the underlying business can keep payments flowing.
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Disclosure: Calvina does not own any of the shares mentioned. Chin Hui Leong contributed to the article and does not own any of the shares mentioned.
