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Hey there, fellow REIT investors! If you’ve been holding REITs in 2025… you probably haven’t felt much excitement.

By the halfway mark this year, the CSOP iEdge S-REIT Leaders index ETF is down around 5%. But when you include dividend yields—which are still averaging close to 6% a year—total returns have been… well, about flat.

Not terrible. But not great either.

It’s like running on a treadmill for 6 months. You’ve done all the hard work – but you’re still in the same spot. 

And yet, beneath that flat market performance, a lot actually happened. Some REITs quietly delivered double-digit gains. Others—once considered dependable—dropped hard. And a few made surprising comebacks… only to reveal that recovery stories are never as simple as they seem.

That’s why today, I want to unpack what really happened in the first half of 2025 – some themes that are significant enough to sit up and take note of.

Because if there’s one lesson from this half-year, it’s this: This isn’t a buy-and-hold-and-forget market anymore!

It’s a market where you need to know what you’re holding, why you’re holding it, and whether anything has quietly changed. In short, we need to pay attention.

Before we dive in, let me remind you that this post is for informational purposes only and not financial advice. Always do your own research and consult a licensed financial adviser before making any investment decisions. I own some of the REITs discussed, but what works for me might not work for you.

Alright, let’s get started. 

Theme 1: Even Dependables Can Falter

We all know the usual suspects when it comes to stable REITs. Parkway Life REIT. CapitaLand Integrated Commercial Trust. These are the names that give us peace of mind. The ones that anchor our portfolios.

So it might not surprise you that Parkway Life REIT rose 8.8% and CICT gained 6.2% in the first half of 2025. But how many of you recall that not too long ago, Mapletree Logistics Trust was also one of the stable REITs on the Singapore market? So what did surprise many—including me—was that Mapletree Logistics Trust dropped 15% within the first 6 months of the year..

This is a REIT that, for years, was considered one of the safest hands in the game. Strong sponsor. Diversified portfolio. Resilient tenant base. So what happened?

Part of it was rising concerns around slowing growth in its China portfolio. Part of it was the market rethinking valuation premiums as a result of tariff uncertainties which affects global trade – right up MLT’s alley. Even the optimism in the market over the trade deal with China did not boost MLT’s share price. This is because potential impact on Asian trade, beyond just China, remains the top concern of investors.

And part of it was also this: in a higher-for-longer rate environment, even the strongest REITs get re-rated. 

Parkway’s still your kopi-o kosong—reliable, stable, does its job. MLT? That was your kopi-C… until someone forgot to stir.

The takeaway here is this: no REIT gets a free pass.

What used to be a no-brainer buy needs to be reviewed—because markets change, and our assumptions need to change with them. Even core REITs need regular health checks.

Theme 2 – Same Country, Different Outcome

Let’s talk about the United States. Now, if I told you a US-focused REIT was the top performer in the first half of 2025, you might laugh.

After all, US interest rates stayed high, the Fed kept pushing back cuts, and the office market in the US—especially in places like San Francisco—was still struggling.

And yet, the best-performing S-REIT in the first half of the year was…

Acrophyte Hospitality Trust, previously known as ARA US Hospitality Trust—up 22.5%. 

That’s right. A US REIT.

But not an office REIT.

It’s in the hospitality sector—US hotels, to be precise. And in 2025, travel has bounced back, business events have picked up, and hotel revenues are rising.

Now contrast that with Manulife US REIT, which is down 30.3%, and Prime US REIT, down 21%.

Same country. Totally different stories.

Manulife and Prime are still stuck in the troubles of the US office market—high vacancies, refinancing stress, and very little rental upside. Yes, there are signs of US workers going back to the office, but risks remain.

Acrophyte, on the other hand, is riding the post-COVID travel and hospitality rebound.

So what does that tell us? It’s not just where your REIT is located—it’s what sector it’s in. Geography matters, yes. They are probably affected by similar macro factors, and interest rate trends. But the sector matters just as much—if not more.

The US office REITs may still bounce back eventually—but in the first half of this year, the specific sector you were in made all the difference.

Theme 3 – Recovery Is Never Simple

Now let’s talk about recoveries—those REITs that everyone left for dead in 2024, but suddenly showed signs of life.

Take Elite UK REIT. Last year, it was struggling. Investor confidence took a hit after worries over tenant concentration and interest coverage ratios.

But in the first half of 2025? It’s up 8.5%—among the top 5 performers across all S-REITs. A solid bounce – alongside distributable income and DPU surging 10% in Q1 2025. Its dividend yield? A solid 9.5%. Slowly, bit by bit, investor optimism returning.

But here’s the catch. A substantial portion of Elite’s income comes from UK government leases.

And a significant number of those leases are expiring soon, in about a year’s time. That introduces real risk—uncertainty about renewals on more than 90% of its total leases, possible occupancy drops, and income volatility ahead.

So while the recovery looks good on the surface, the road ahead isn’t smooth. To me, it’s like my kid bringing home better grades for the mid-year weighted assessments… but I know the exams that matter, the PSLE, are coming up at the end of the year.

Now flip the script and look at Digital Core REIT—a name you’d think would benefit from the AI and data centre boom.

But it’s down 14.7% this year. Why? Because the excitement hasn’t translated to its fundamentals—yet.

Occupancy is still in transition. Rental reversion hasn’t popped. And the market’s been impatient.

But behind the scenes, interest in data centres is exploding again.

Just look at Nvidia’s recovery from investor jitters at the start of the year; or the surge in share price of CoreWeave which jumped more than 50% in one week, driven by the generative AI ecosystem.

Data centres aren’t dead. They’re just biding their time. This year, everyone loved AI—but forgot someone has to power all that cloud computing.

So here’s the big takeaway: A recovery isn’t always what it seems. Sometimes it’s a sugar rush. Sometimes it’s a slow burn.

And sometimes, the ones that look weak now… might be setting up for the next run.

Before we move on, if you found this post useful so far, please give this Uncle a thumbs up—it really helps reach other income-focused investors like you. Thank you guys! 

What Will Drive REITs in H2 2025

So after a flat and fragmented first half… what should we expect for the second half of 2025?

Well, that depends on two things: what the market does, and what the REITs themselves do.

Let’s start with the big picture. We’re still watching the US Federal Reserve. Will they finally cut rates? Will inflation drop enough for the Fed to loosen policy? Because let’s be honest—if Fed Chair Powell even hints at a September cut, REITs could possibly jump 5 to 10% in a matter of days, but of course nothing is guaranteed. That’s how much this market has been waiting for relief.

But here’s the thing—and I talked about this in a previous post—Singapore interest rates have already started drifting lower. The 6-month T-bill is now around 2.30%, the 1-year around 2.29%. So while US rates are stuck, local rates are softening.

And for REITs with SGD debt, that’s already easing refinancing pressure and cost – I’ve discussed this in greater details in my previous post – take a look if you’re interested. 

So we might get a two-speed environment—tougher for US REITs, but a bit more forgiving for REITs here at home.

Now beyond macro, a lot of second-half performance may come down to what the REITs themselves do.

We could see more asset divestments to unlock value. Think MLT’s active acquisition/ disposal strategy. We could see refinancing in SGD, or even in CNY, or GBP, or EUR debt at lower interest rates which may support share prices for certain REITs. 

Or we could see something like what’s already happening with Frasers Hospitality Trust, a full privatisation offer. And this last one is important.

Because if a sponsor is willing to take a REIT private—it often means one thing: They believe the REIT is undervalued. If insiders are buying out entire REITs at a premium… maybe the market is missing out that certain REITs could be undervalued. 

I’ll also be watching for earnings surprises. If REITs like Digital Core REIT or Manulife US REIT deliver better-than-expected updates, sentiment could swing fast.

So yes, macro still matters. But this second half? It might not be all about Powell anymore. It might be about performance, positioning, and how each REIT plays its hand.

The Dividend Uncle’s Take

So here’s how I see it.

The first half of 2025? Underwhelming on the surface. The S-REIT index is down. Sentiment is weak. And the Fed? Still dragging its feet.

But step back, and the picture is more nuanced. The dividends kept flowing. Some REITs quietly climbed. Others stumbled, reminding us not to get complacent.

And even in the toughest markets—like US office—there were signs of life, like what we saw with Acrophyte Hospitality Trust.

So what am I doing?

I’m still holding my core REITs. The ones that have proven they can weather storms, even when prices are choppy.

But I’m also watching—carefully. Because this market isn’t offering a broad rally. It’s offering pockets of opportunity. Some REITs might look weak now, but have upside if rates fall or operations recover. Others may bounce for a while but face real risks beneath the surface.

That’s why I’m not making big bets. But I’m not sitting still either. I’m trimming where valuations feel stretched. I’m adding where long-term value and stability are being overlooked.

And I’m staying diversified—because as we’ve seen, even the strongest names can falter if you stop paying attention. This isn’t a year to chase hype. It’s a year to tune out the noise, stay selective, and position for the long game.

Alright, that’s all for today. Which REIT surprised you the most in the first half of 2025? And what are you watching for in the second half?

If you found this post useful, give it a thumbs up. And I’d love to hear your thoughts. And if you’re new here, hit subscribe. Every week, I break down the latest trends in REITs, dividends, and long-term portfolio building—calmly, clearly, and always with retirement in mind.

Until next time, stay steady, stay invested… and don’t forget—flat returns don’t mean flat thinking.