For the most part, investors are enamoured with blue-chip stocks for good reason: these companies usually provide consistent compounding over the long term.
However, if you are looking to juice your portfolio income, including some high-yielding REITs (above 6% in today’s market) makes sense.
That said, with a higher yield potential, we must be more cautious in our REIT selection.
Let’s examine some potential choices available in the market now.
Why REITs Often Yield More Than Blue Chips
REITs typically rank highly on income investors’ lists as they are mandated to distribute at least 90% of taxable income to shareholders to enjoy tax benefits.
Combined with the steady nature of rental income they earn from their properties, it’s no wonder REITs are more geared towards income generation, compared to blue-chip companies that retain earnings to grow their business.
While REITs are more suited for investors focused on income generation, the sustainability of the distribution payout is of utmost importance.
How to go about assessing distribution sustainability is simple: is the current distribution adequately covered by cash flows generated?
Is the occupancy rate high, and is the REIT recording positive rental reversions?
Does the REIT have reasonable leverage, and is its debt maturity profile manageable?
At the end of the day, a high yield is only good if it’s sustainable.
AIMS APAC REIT (SGX: O5RU), or AAREIT — The Defensive High-Yield REIT
This REIT powerhouse, with significant exposure across the industrial and logistics segment, stands out with its defensive tenant base.
For the nine months ending 31 December 2025 (9MFY2026), AAREIT derives more than 80% of its rental income from essential and defensive industries, including logistics, consumer staples, healthcare, and telecommunications.
The REIT reported a solid overall occupancy rate of 95.4% as of 31 December 2025, with a modest leverage ratio of 36.6%.
AAREIT currently offers a trailing yield of roughly 6.6%.
The distribution per unit (DPU) for the REIT has been stable over the last four years, which stands out given the higher interest rate environment and geopolitical headwinds.
The key takeaway here is that high yield, when backed with stability, is especially attractive.
CapitaLand China Trust (SGX: AU8U), or CLCT — The Recovery Yield Story
CLCT is an interesting pick for investors who think the market is underappreciating the turnaround in this China REIT.
Currently, CLCT offers an annualised distribution yield of roughly 7.3%, which is rather elevated given the recent operational improvements seen in its full-year results for the year ended 31 December 2025 (FY2025).
CLCT reported an improvement in its retail portfolio, shopper traffic and tenant sales, alongside improved business park occupancy rates from the previous quarter.
However, rent reversions have generally been negative, with DPU also experiencing a negative trend.
The REIT’s future financial performance could be set for improvement, given the recent Chinese initiatives to stimulate local consumption.
Meanwhile, you are well compensated to wait for a possible turnaround with a 7.3% yield, and an undemanding valuation of roughly 0.65 times net book value.
Stoneweg Europe Stapled Trust (SGX: SET), or Stoneweg — The Cash Flow Resilient Trust
This European REIT, with 60% of its portfolio across industrial (logistics, data centres) and the remaining 40% in prime commercial assets, might be a tad underappreciated by the market given its cash flow generation.
Its latest FY2025 (ending 31 December 2025) net operating cash flow came in at €86.7 million, up 22.6% year on year (YoY).
Stoneweg’s tenant base is decently defensive, with 90% of its tenants being large multinational corporations and government / quasi-government entities.
Tenant diversity is decent as well, with the largest tenant only contributing 3.9% of total headline rent, supporting the REIT’s recurring rental income (weighted average lease expiry of 4.9 years) and distributions.
Looking at the balance sheet, we find interest coverage to be adequate at 3.1 times as of 31 December 2025.
Management is guiding for FY2026’s distribution to be in line with FY2025, at roughly €0.13365, which works out to a forward yield of roughly 8.9%.
Adding to the margin of safety, Stoneweg currently trades at a price-to-book (P/B) ratio of 0.76 times.
What Income Investors Should Watch Before Buying
High yields in the REIT space are often a tug-of-war between an overly pessimistic market and a real warning signal of distress.
You have to assess for yourself whether the market is being unfair in its pricing.
Look at the strength of the balance sheet, and find out if any large debt is maturing soon.
What’s the trend of the REIT’s DPU? Is it stable, improving, or softening?
Finally, how is the overall sector doing?
Get Smart: The Best High Yields Are the Ones You Can Actually Keep
In sum, it could make sense for you to include higher-yielding REITs such as the ones covered in this article to juice your income.
However, a large yield figure does not automatically mean it’s a buy.
As smart investors, you have to do your homework to make sure the yield is sustainable.
Imagine receiving steady rent increases for more than two decades. It sounds unusual, but one healthcare REIT already has rental escalations locked in until around 2042. Income visibility like this is hard to find today. We break down how this REIT built such dependable cash flow in our FREE dividend report and how it could strengthen a retirement portfolio. Get the free report here.
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Disclosure: Wilson H. does not own shares in any of the companies mentioned.
