In this episode of The One Good Chat Podcast, Joey and the team sit down with Kenny Loh (founder of REITsavvy) to discuss building sustainable passive income and protecting family wealth. Kenny covers his shift from engineering to finance, Singapore REIT strategies—including dividend sustainability and optimal entry timing—and critical estate planning tools like wills, trusts, and Lasting Power of Attorney (LPA).
Kenny Loh is a distinguished Wealth Advisory Director with a specialisation in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring capital appreciation through risk mitigation approaches and optimised wealth transfer through strategic asset structuring.
In addition to his advisory role, Kenny is an esteemed SGX Academy trainer specializing in S-REIT investing and regularly shares his insights on MoneyFM 89.3. He holds the titles of Certified Estate & Legacy Planning Consultant and CERTIFIED FINANCIAL PLANNER (CFP).
With over a decade of experience in holistic estate planning, Kenny employs a unique “3-in-1 Will, LPA, and Standby Trust” solution to address clients’ social considerations, legal obligations, emotional needs, and family harmony. He holds double master’s degrees in Business Administration and Electrical Engineering, and is an Associate Estate Planning Practitioner (AEPP), a designation jointly awarded by The Society of Will Writers & Estate Planning Practitioners (SWWEPP) of the United Kingdom and Estate Planning Practitioner Limited (EPPL), the accreditation body for Asia.
Here are broadcast-ready spoken drafts tailored for a live interview on MoneyFM 89.3. They are structured with clear, punchy, conversational phrasing that transitions seamlessly on air while maintaining institutional rigor.
Section 1: Why Have S-REIT Prices Fallen?
1. What drove September’s sell-off, and how much of it was justified by the REITs’ performance?
“What we saw in September was essentially a macro sentiment sell-off rather than an operational crisis.
The primary catalyst was a sudden spike in long-term bond yields. The Singapore 10-year government bond yield jumped roughly 23 basis points to around 2.58%, alongside rising US Treasury yields. Because REITs are priced relative to risk-free benchmark yields, higher bond yields compress the yield spread—forcing unit prices downward. The FTSE ST REIT Index dipped over 5.7% as a result.
Now, is that sell-off justified? In our view, it’s overdone.
If you look under the hood, key operating fundamentals across major S-REITs remain sound. Occupancies are healthy, rental reversions stay positive, and asset valuations have held firm. The market priced in macro rate anxiety rather than operational deterioration.”
2. UOB Kay Hian points to low domestic borrowing costs. Why are concerns about US interest rates still weighing on S-REITs?
“That comes down to two main drivers: global capital flows and overseas debt exposure.
First, institutional global capital looks at S-REITs relative to US Treasury yields. If a risk-free 10-year US Treasury offers attractive returns, global fund managers demand a wider yield spread to hold Singapore REITs, which drags down unit prices regardless of local fundamentals.
Second, while domestic borrowing costs—like the 3-month compounded SORA—have moderated to the 1.1%–1.2% range, many larger S-REITs hold overseas properties funded by US Dollar or Euro debt. Higher US interest rates keep refinancing costs elevated for those foreign tranches. So while local Singapore debt stays cheap, US rate sentiment still sets the international pricing floor.”
3. Which property sectors look stronger today, and where are you seeing signs of weaker demand?
“We see a clear divergence across sectors:
• The Clear Outperformers:
Data Centres and Industrial / Logistics. Demand driven by AI infrastructure, cloud adoption, and supply chain regionalisation remains structural and resilient. Singapore Retail also remains solid, supported by low unemployment and tourist recovery.
• Sectors Facing Headwinds:
Commercial Office and Overseas Properties. Office assets face headwinds from flexible work arrangements and shadow space. Overseas assets—particularly US office trusts or European logistics properties—are feeling pressure from higher local interest rates, currency weakness, and slower tenant absorption.
The key today is staying close to high-quality Singapore-centric assets.”
Section 2: Do Higher Yields Make Them Worth Buying?
4. What should investors check first to judge whether a REIT can maintain its payout?
“High headline yields can easily be a dividend trap if Distribution Per Unit (DPU) isn’t sustainable. Before buying, investors should check three crucial metrics:
1. Interest Coverage Ratio (ICR):
Look for ICR well above 3x. A healthy buffer ensures rising debt costs won’t immediately eat away at cash distributions.
2. Debt Maturity Profile & Hedging:
Check how much debt is expiring over the next 12–18 months and whether 70% to 80% or more of their debt is locked into fixed rates.
3.Aggregate Leverage:
Ensure gearing sits comfortably below 40-42%. That gives the manager headroom without needing emergency, dilution-heavy rights issues.”
5. CapitaLand Ascendas REIT’s H1 income available for distribution rose 8.6%, but its payout per unit barely increased. What explains that gap?
“This is a classic example of unit dilution vs. total earnings growth.
While total distributable income grew by 8.6% thanks to strong operational execution and new acquisitions, the total number of units on issue also expanded. That unit expansion happened through private placements and units issued for management fees.
When your profit pie grows by 8.6%, but you slice that pie among 8% more units, the slice per unit—or DPU—remains virtually flat. It highlights why investors must always look at per-unit metrics, not just aggregate income figures.”
6. Mapletree Industrial Trust’s latest quarterly payout fell 4.9% year-on-year. What would you need to see before considering it for income?
“MIT is dealing with two specific headwinds: higher borrowing costs and re-tenanting drag at some of its US data centres.
Before turning constructive on MIT for income, I would look for three signals:
1.Stabilization of US Data Centre Occupancy:
Backfilling vacant space or re-leasing at positive rental reversions.
2. Refinancing Peak Pass-Through:
Confirmation that their weighted average cost of debt has stabilized.
3. Accretive Capital Recycling:
Selling older, low-yielding Singapore general industrial assets to fund higher-yielding data centre acquisitions or lower debt.
Once DPU decline bottoms out and stabilizes, MIT’s high-quality portfolio makes it a strong candidate for long-term income.”
7. Keppel REIT’s payout includes temporary anniversary payments ending after H1 2027. How should investors assess the income they can expect beyond that?
“Investors need to strip out those temporary top-ups to calculate the core organic yield.
Keppel REIT’s 50th-anniversary distributions contribute a fixed amount each quarter until H1 2027. To assess true underlying performance:
• Deduct that anniversary payout from the current DPU to find the base operational DPU.
• Check whether organic rental growth—from assets like Ocean Financial Centre or Marina Bay Financial Centre—and income from recent acquisitions (like 255 George Street in Sydney) can bridge that gap by 2027.
If organic rent growth can replace that top-up over the next two years, the yield is sustainable. If not, investors should price the stock based purely on its base core distribution.”
8. Of these three, which looks most attractive to you now, and what is the main risk investors should weigh?
“Of the three, CapitaLand Ascendas REIT (CLAR) looks the most attractive today.
CLAR offers a highly diversified, blue-chip portfolio spanning tech parks, logistics, and data centers across Singapore, the US, Europe, and Australia. It benefits from an exceptional sponsor, strong credit rating, and healthy balance sheet.
• The Main Risk: Its overseas exposure. Foreign exchange fluctuations and higher refinancing costs on European and US properties remain the main drag on DPU growth. But for stability, scale, and long-term total return, CLAR leads the pack.”
Section 3: Could Mergers Improve Returns?
9. What problems could a merger solve for a smaller REIT?
“Scale is everything in the REIT market today. Merging solves three major problems for smaller REITs:
1.High Cost of Debt:
Smaller trusts pay wider credit spreads. Merging into a larger entity improves credit ratings and lowers borrowing costs.
2. Poor Stock Liquidity:
Small-cap REITs suffer from low trading volume, keeping institutional investors away. Larger market caps drive inclusion into major indices (like the FTSE EPRA Nareit Index), driving passive fund inflows.
3.Lack of Growth Runway:
Small REITs near their leverage limits can’t acquire new assets accretively. A larger balance sheet unlocks bigger, transformational deals.”
10. If a merger is proposed, what should investors check to see whether they would receive a fair deal?
“Unitholders should evaluate three critical deal terms:
• NAV Premium/Discount:
Is the acquisition offer at or above Net Asset Value (NAV), or is one side being absorbed at a steep discount?
• DPU Accretion:
Is the merger immediately DPU-accretive to existing unitholders, or does it dilute short-term returns for vague ‘future synergies’?
• Exchange Ratio & Cash Portion:
If it’s an all-unit swap, examine whether the relative valuations fairly reflect both portfolios’ asset quality.”*
11. Could combining two struggling REITs leave investors with a bigger trust but the same problems?
“Absolutely—we call that ‘putting two bad apples in one basket.’
If you merge two sub-scale REITs that both suffer from weak assets, high leverage, or poor geographic locations, scale alone won’t fix the underlying asset quality. You end up with a larger entity that still faces structural vacancy and debt refinancing headwinds.
A successful merger requires complementary portfolios and a strong sponsor capable of injecting fresh, quality pipeline assets and lowering borrowing costs.”
12. For someone already holding S-REITs at a loss, how should they decide whether to hold, buy more or sell?
“I suggest applying a simple 3-Step Audit to your holdings:
1. Sell / Cut Losses:
If the REIT has weak sponsors, high debt (>45% gearing), low interest coverage (<2.5x), and assets in structural decline (e.g., pure US commercial office). Don’t hold purely hoping for a rebound.
2.Hold:
If the REIT owns quality assets with positive rental reversions, but is temporarily suppressed by high interest rates. Let the distribution yield pay you to wait.
3. Buy More (Dollar-Cost Average):
If it’s a blue-chip REIT (like CICT, CLAR, or Keppel DC REIT) with a strong sponsor, gearing below 40%, and dividend yields above 6%. Lowering your average cost here positions you well for when rate cuts materialize.
Focus on asset quality and balance sheet strength over short-term price volatility.”
Kenny Loh is a distinguished Wealth Advisory Director with a specialisation in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring capital appreciation through risk mitigation approaches and optimised wealth transfer through strategic asset structuring.
In addition to his advisory role, Kenny is an esteemed SGX Academy trainer specializing in S-REIT investing and regularly shares his insights on MoneyFM 89.3. He holds the titles of Certified Estate & Legacy Planning Consultant and CERTIFIED FINANCIAL PLANNER (CFP).
With over a decade of experience in holistic estate planning, Kenny employs a unique “3-in-1 Will, LPA, and Standby Trust” solution to address clients’ social considerations, legal obligations, emotional needs, and family harmony. He holds double master’s degrees in Business Administration and Electrical Engineering, and is an Associate Estate Planning Practitioner (AEPP), a designation jointly awarded by The Society of Will Writers & Estate Planning Practitioners (SWWEPP) of the United Kingdom and Estate Planning Practitioner Limited (EPPL), the accreditation body for Asia.
REITs are often viewed as a relatively straightforward way to gain exposure to real estate while receiving regular distributions. However, there are several misconceptions about how REITs work and the risks involved. Understanding these misconceptions can help investors better assess the potential risks and returns of investing in REITs.
First Misconception: REITs Are Not Very Volatile Because They Own Real Estate
A common misconception is that REIT prices should remain relatively stable because REITs are essentially landlord businesses that own and collect rental income from properties.
However, REITs are also equity securities traded on the stock market, which means their unit prices can fluctuate in response to market conditions, economic developments and investor sentiment.
One important factor is interest rates. REITs commonly use debt to finance property acquisitions and operations. When interest rates rise, borrowing and refinancing costs can increase, which may place pressure on a REIT’s interest expenses and distributable income. Higher interest rates can also affect how investors value REITs relative to other income-generating assets.
As a result, even though the underlying properties may continue generating rental income, the market price of the REIT can still experience significant volatility.
In other words, owning real estate through a REIT does not mean the investment will behave like a stable property asset. Investors should remember that they are buying a listed equity security whose price is determined in the secondary market.
Second Misconception: Real Estate and REITs Cannot Go Bust
Another misconception is that investing in real estate or REITs is inherently safe because property is a tangible asset.
While REITs own or have interests in real estate, they can still experience serious financial difficulties. A REIT may face problems if it has excessive debt, insufficient cash flow, declining property income, refinancing difficulties or other financial pressures.
There have also been cases where listed property trusts have faced severe financial distress, including situations involving suspensions, restructuring or significant declines in value.
Investors should also recognise that the value of a REIT ultimately depends on the quality and financial performance of its underlying assets, as well as how effectively its management handles debt, property valuations and cash flow.
Therefore, owning property does not make a REIT immune to financial distress. A REIT’s balance sheet, debt maturity profile, property valuations and operating performance remain important areas for investors to monitor.
Third Misconception: REITs Are Risk-Free
Perhaps one of the most important misconceptions is that REITs are a risk-free alternative to cash or safer savings and fixed-income instruments simply because they provide regular distributions.
For example, an investor may compare the 2.5% interest credited to CPF Ordinary Account (CPF OA) with a REIT yielding 5–8% and conclude that moving money from CPF OA into REITs could provide a higher return.
However, the higher REIT yield comes with investment risk.
CPF savings and listed REITs are fundamentally different types of assets. CPF OA savings earn an interest rate and form part of Singapore’s government-administered CPF system, while REITs are listed securities traded in the secondary market. Their unit prices can rise or fall, distributions can change, and investors are exposed to factors such as interest-rate movements, property-market conditions, leverage, refinancing risk and market sentiment.
Therefore, a 5–8% REIT distribution yield should not be interpreted as a guaranteed return. The distribution is only one component of the investment’s potential return, while the market value of the REIT can fluctuate significantly.
Investors should therefore consider both income and capital risk when evaluating REITs, rather than viewing the headline distribution yield in isolation.
The Key Takeaway
REITs provide investors with a way to gain exposure to income-generating real estate through a listed security, but they are not the same as directly owning a physical property and they are certainly not risk-free.
Three misconceptions are particularly important to remember:
REITs can be volatile because they are listed equity securities and are affected by market and economic conditions.
REITs can experience financial distress despite owning tangible property assets.
REIT distributions are not guaranteed, and a higher yield generally comes with investment risks that need to be considered.
Ultimately, investors should look beyond the headline yield and understand the REIT’s debt levels, interest costs, refinancing requirements, property portfolio, occupancy, lease profile and distribution sustainability before making an investment decision.
Kenny Loh is a distinguished Wealth Advisory Director with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.
In addition to his advisory role, Kenny is an esteemed SGX Academy trainer specializing in S-REIT investing and regularly shares his insights on MoneyFM 89.3. He holds the titles of Certified Estate & Legacy Planning Consultant and CERTIFIED FINANCIAL PLANNER (CFP).
With over a decade of experience in holistic estate planning, Kenny employs a unique “3-in-1 Will, LPA, and Standby Trust” solution to address clients’ social considerations, legal obligations, emotional needs, and family harmony. He holds double master’s degrees in Business Administration and Electrical Engineering, and is an Associate Estate Planning Practitioner (AEPP), a designation jointly awarded by The Society of Will Writers & Estate Planning Practitioners (SWWEPP) of the United Kingdom and Estate Planning Practitioner Limited (EPPL), the accreditation body for Asia.
