The Ultimate Guide To REITs Investing In Singapore

Updated: Nov 27, 2020



Investing in properties is most of the Singaporean’s dream. Own multiple properties, become a landlord, collect a consistent stream of rental income… And this make lots of sense for a small country like Singapore where the land is scarce.

Historically, the Singapore property price has been in the uptrend. As compared to 40 years ago, the price has surged by more than 12 times! For investment properties with rental income, investors would have enjoyed an average of 12% to 15% return per annum over the years!

Singapore Private Property Price Index (Source: data.gov.sg)

However, for a small retail investor like us, you need a huge sum of money to to start with. In the past few years, we have been seeing the resale price for some HDB flats across the islands surged pass the $1 million mark! Most of us can barely have enough money for a HDB flat to live in. With a requirement of at least 20% downpayment, you will easily need a minimum of $100k to $200k just to own a residential property. Unless you have a big fat wallet, otherwise, it is a bit tough for retail investors like us to scale your property portfolio in Singapore.


HDB Price Is Crossing $1 Million (Source: thedgeprop)

On the other hand, as a property investor, there will an on-going effort on managing tenants, chasing for rentals, maintenance, refinance your loans etc… You will then realise that being a landlord is not as simple as you thought.

So what if you still want to be a landlord? Good news is there is simpler solution. You can invest in real estate investment trusts (REITs).

What are REITs?


Singapore REITs are the listed companies that you can invest in. It is very similar to how you would buy shares through Singapore Stock Exchange (SGX). Instead of running different types of businesses, REITs use the investors’ money to buy, operate and manage properties. In other words, by investing in REITs, you gain exposure on properties managed by that REIT. You become the co-owner of those properties like industrial buildings, hotels, shopping malls, business parks …

REITs are regulated to payout at least 90% of the distributable income to their unit