REITs in Singapore: How They Pay, Gearing Limits and the Risks

By The Ledger desk · Last verified 7 October 2026

A real estate investment trust (REIT) pools investors’ money to own income-producing property, such as malls, offices, warehouses, data centres or hospitals, and is traded on SGX like a share. To be taxed only at the unitholder level, a Singapore REIT must distribute at least 90% of its taxable income in the same year, and those distributions are tax-exempt for most individual investors. Borrowing is capped by MAS: since 28 November 2024, every REIT faces a single aggregate leverage (gearing) limit of 50% of its deposited property and a minimum interest coverage ratio of 1.5 times. Those rules limit the risk but do not remove it: unit prices, distributions and interest costs can all move against you.

REITs let you own a slice of landmark buildings with a few thousand dollars, and the regular payouts are a cheerful thing to find in your bank account. Knowing the numbers behind them helps you tell a sturdy REIT from a stretched one.

Quick facts

• REITs must distribute at least 90% of taxable income in the same year to keep tax transparency.
• Distributions to individuals are generally tax-exempt, unless received through a partnership or as part of a trade or business.
• Qualifying foreign non-individual investors pay a reduced 10% final withholding tax, a concession running until 31 December 2030.
• MAS caps aggregate leverage at 50% and requires an interest coverage ratio of at least 1.5 times.
• Since 31 March 2025, REITs must publish sensitivity analyses of their interest coverage.
• You buy REIT units on SGX through a broker and a CDP or custodian account.

How do REITs pay you?

Tenants pay rent to the REIT. After property costs, interest and management fees, most of the remaining income is paid to unitholders as distributions, announced with each set of results. Each REIT sets its own payment schedule, commonly twice a year or quarterly, and announces the amount per unit, the ex-date and the payment date on SGX.

A worked example: yield and gearing (illustrative figures)

1. Yield: you buy 1,000 units at S$1.50, costing S$1,500 before fees. If the REIT pays 5 cents a unit over a year, you receive S$50, a distribution yield of S$50 ÷ S$1,500 = 3.33%.
2. Gearing: a REIT with S$10 billion of property and S$4 billion of borrowings has aggregate leverage of about 40%, below the 50% cap.
3. Interest cover: if its earnings before interest, tax, depreciation and amortisation (EBITDA) are S$300 million and its interest bill is S$120 million, its ICR is 2.5 times, above the 1.5-times minimum.

These numbers are made up to show the sums. Each REIT reports its real gearing and ICR in its results and annual report.

What do the MAS gearing rules say?

Rule	Before 28 November 2024	From 28 November 2024
Aggregate leverage limit	45%, or up to 50% with conditions	A single limit of 50% for all REITs
Interest coverage requirement	2.5 times, only for REITs going above 45%	At least 1.5 times for all REITs
Disclosure	Leverage and ICR reporting	From 31 March 2025, sensitivity analyses showing ICR after a 10% fall in EBITDA and a 100 basis point rise in interest rates; extra disclosure on improvement plans if ICR falls below 1.8 times

The risks to understand

Risk	What it means	What to look at
Interest rates	Higher rates raise borrowing costs and can push unit prices down.	ICR, share of fixed-rate debt, debt maturity profile
Property and tenants	Vacancies, weaker rents or a key tenant leaving cut income.	Occupancy, lease expiry profile, tenant concentration
Price swings	Units trade on SGX and can fall below what you paid.	Price to net asset value, your holding period
Fundraising	New units issued in placements or rights issues can dilute existing holders.	Past fundraising, gearing headroom
Overseas assets	Currency moves and foreign taxes can reduce what reaches you in Singapore dollars.	Geographic mix, hedging policy
Fees and sponsor	Management fees and related-party deals affect returns.	Fee structure, sponsor’s track record

The WahLiao Verdict

REITs can be a pleasant source of regular, tax-free income for individuals, but buy them for the property and the balance sheet, not the headline yield. Favour REITs with comfortable gearing, a healthy interest cover and well-spread tenants, and spread your money across several property types or use a REIT ETF. Reinvest or spend the distributions as you like, and be ready to hold through the years when rates rise and prices sag.

Questions people ask

Do I pay tax on REIT distributions?

Individuals are generally exempt, provided the distributions are not received through a Singapore partnership or as part of a trade or business, according to IRAS.

What is a good gearing level?

There is no single right number. The legal cap is 50%, and a REIT well below it has more room to absorb a fall in property values or to borrow for opportunities.

Why did my REIT’s distribution fall?

Common reasons are higher interest costs, lower occupancy or rents, currency moves on overseas assets, or more units in issue after fundraising. The results announcement explains the change.

Can I buy REITs with CPF or SRS money?

SRS money can be used to buy SGX-listed securities through your SRS operator. CPF Investment Scheme rules set out which listed investments are allowed, so check the CPF Board’s list before you buy.

Sources: Inland Revenue Authority of Singapore, e-Tax Guide on the income tax treatment of REITs; Allen & Gledhill, MAS’s revised REIT leverage requirements. The Ledger explains; it does not advise.

Read next: Buying Shares on SGX: CDP Accounts, Board Lots and Brokerage Fees · The Supplementary Retirement Scheme (SRS): Tax Relief, Withdrawals and the 5% Penalty · Back to The Ledger

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