To The Moon

For those who are unable to attend the forum, I summarise the Q&A in panel discussion below:

Bridging the Confidence Gap: How Overseas-Focused REITs Can Win Investor Trust

I think the biggest challenge for overseas-focused REITs is really about familiarity and trust. When investors look at local REITs, they can easily relate to the assets – they know the malls, the offices, they can see them. With overseas assets, that familiarity gap creates concerns around asset quality, local regulations, and even currency risks.

What I’ve seen work well is when REITs make a conscious effort to bridge that gap with education and transparency. For example, some REITs conduct detailed virtual tours, regular property updates, and even case studies on key tenants so investors feel they can “see” the assets, even from Singapore. That helps to build confidence in the overseas portfolio.

I have a chance to visit the properties in Ealing, London and Glasgow owned by $EliteComREIT GBP(MXNU.SI)$ ; 4 different asset commercial office and light industry in Amsterdam owned by $Stoneweg EUTrust EUR(SET.SI)$ . I can see (ESG implementation of the Solar panels and energy saving initiative in the building myself. I shopped in $Sasseur Reit(CRPU.SI)$ malls in ChongQing. Some of my colleagues place the trade immediately after visiting the malls.

The second factor is governance and communication. Because investors can’t verify things on the ground, management credibility becomes the most important trust anchor. Investors want to see CEOs and CFOs who are proactive, who don’t just report numbers, but actually explain the drivers behind occupancy or rental reversions, and more importantly, what they’re doing to address potential risks. A management team that engages actively and listens to investors tends to win a lot more support over time.

Looking ahead, I think overseas REITs can do even more to win trust by continuing to increase transparency, for instance by reporting performance at a more granular country level, and by giving investors clearer insights into their growth strategy, not just portfolio expansion for its own sake.

Ultimately, it comes down to reciprocity – if management makes the effort to educate and engage unitholders, and shows alignment in protecting yields, investors will be far more willing to support overseas-focused strategies.

Falling Interest Rates: Why REITs Shine As Income Solutions

We’ve seen interest rates in Singapore fall quite sharply – from T-bills (3.2% to 1.6% in 1 year) to deposit rates (OCBC 12 months FD at 1.3%) – and that naturally makes yields offered by REITs (5.5% average) look relatively more attractive. But I think as investors, it’s important not just to look at this in isolation, but to ask: what does this mean for me personally?

For retirees or those relying on cash savings, lower deposit rates can actually shrink purchasing power if your money is sitting idle. That makes the need for sustainable passive income streams more urgent. In that sense, REITs continue to play a key role by offering distributions that are significantly higher than what you’d get from fixed deposits today.

From the REIT perspective, lower rates are a double benefit. Not only do investors find the yields more compelling, but REIT managers also enjoy a lower cost of debt, which can support acquisitions or refinancing. This, in turn, helps protect and potentially grow the distribution per unit (DPU) over time.

Now, as a financial advisor, my message to clients is twofold. First, focus on what you can control — understand how lower rates affect your own financial plan. If cash returns are falling, make sure your portfolio is structured to maintain your desired lifestyle and retirement income.

Second, when it comes to REITs, don’t over-scrutinize short-term rate movements or micromanage management decisions. REIT managers are paid professionals — their responsibility is to manage the portfolio, hedge risks, and pursue growth. Our role as investors is to assess their track record: are they growing DPU sustainably, are they communicating transparently, are they aligned with unitholders?

Interest rates may be trending down and stay low for a while, but they won’t be at the bottom forever. That’s why the portfolio must first and foremost serve our needs, and be resilient across different rate environments — let rates guide us, but never dictate the strategy.

Currency Risks in Overseas REITs: What Singapore Investors Should Know

That’s a great question, because it highlights one of the big realities of overseas REIT investing: operationally, the properties may be performing steadily, but when distributions are translated back into Singapore dollars, the returns can look weaker because of FX movements.

I think there are really two layers of currency risk to consider. The first is at the REIT level. Here, the key is whether the trading currency is aligned with the operating and financing currencies. Take Elite UK REIT as an example — its rental income, debt, and distributions are all in British pounds. That means the REIT manager doesn’t face ongoing FX translation risk; the risk lies with Singapore investors, since they need to convert SGD into GBP to invest.

Contrast that with First REIT, which trades in SGD but earns income in Japanese yen and Indonesian rupiah. In that case, the REIT manager must actively manage and hedge the FX exposures before distributions are paid in SGD, and that creates more complexity at the manager’s level.

The second layer of risk is at the investor level. If you’re buying a REIT that trades in a foreign currency, then you as the investor are carrying the exchange risk when converting back to SGD. That’s where portfolio construction comes in. Rather than trying to predict short-term FX moves, a better approach is to manage it at the total portfolio level — for example, by diversifying across REITs with exposure to different regions and currencies, or blending REITs with USD or EUR-denominated bonds. This way, you’re not overly dependent on how one single currency, say GBP or JPY, performs against the Singapore dollar.

So, I would say: yes, exchange rate movements do matter, but they shouldn’t be the deciding factor by themselves. Investors should focus on whether the REIT manager has a clear FX hedging policy, and at the same time, ensure their personal portfolio is well balanced across currencies. If that framework is in place, currency risk becomes something that can be managed, rather than a reason to avoid overseas REITs altogether.

High Yields in Overseas REITs: Opportunity or Red Flag?

That’s a very important question, because when we see certain REITs trading at yields of 8–10%, compared to a sector average of about 6%, the first instinct is often, “Wow, that looks attractive.” But in investing, higher yields almost always come with a message — and the key is to interpret what’s behind them.

I usually encourage investors to first ask: is the higher yield driven by fundamentals, or by sentiment? In some cases, the REIT may genuinely have strong cash flows from higher-yielding asset classes, and the market has simply mispriced it due to short-term pessimism. In other cases, the discount may reflect legitimate concerns — such as tenant concentration, refinancing risks, regulatory changes, or volatility in the local currency.

The second filter is to ask: are these issues one‑off or permanent? For example, an office REIT facing a temporary dip in occupancy while waiting for new leases to commence might still be fundamentally sound, and its elevated yield could present an opportunity. But if the REIT is exposed to structural headwinds, like long-term decline in a sector or persistent currency depreciation with no hedging strategy, then the higher yield could be a red flag, signalling potential capital erosion.

So, beyond just yield, investors should look closely at the quality and sustainability of distributions. Key things I tell my clients to focus on are: 

At the end of the day, yield is an outcome — not the full picture. A high yield can either represent undervalued opportunity or elevated risk. The smarter question to ask is: do I believe the REIT can maintain and grow its distributions sustainably without taking on disproportionate risks? That’s what separates a true long-term opportunity from a yield trap.

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🙎‍♂️ I am Kenny Loh, a Wealth Advisory Director specializing in holistic investment planning and estate management. My mission is to help clients grow their investment capital and create passive income for retirement. I also facilitate tax-efficient portfolio transfers to beneficiaries, ensuring tax-free capital appreciation and optimized wealth transfer through strategic asset structuring.

🤙Feel free to reach out (kennyloh@fapl.sg) for Holistic Legacy Planning and Investment Portfolio Planning.