Investors generally favor blue-chip stocks for valid reasons: these companies typically deliver steady long-term growth.
However, for those aiming to boost portfolio income, incorporating high-yielding REITs—currently offering returns above 6%—is a logical strategy.
That said, the potential for higher yields necessitates greater caution when selecting REITs.
Let's explore some options currently available in the market.
Why REITs Frequently Offer Higher Yields Than Blue Chips
REITs are often prioritized by income-focused investors because they are required to distribute at least 90% of their taxable income to shareholders to qualify for tax advantages.
Coupled with the stable rental income from their properties, it's understandable that REITs are more income-oriented compared to blue-chip companies, which often reinvest earnings for business expansion.
While REITs are well-suited for income generation, the sustainability of their distributions is paramount.
Assessing this sustainability is straightforward: Are the current payouts sufficiently supported by generated cash flows?
Is the occupancy rate high, and is the REIT achieving positive rental reversions?
Does the REIT maintain reasonable leverage, and is its debt maturity profile manageable?
Ultimately, a high yield is only beneficial if it can be sustained.
AIMS APAC REIT — The Defensive High-Yield REIT
This REIT, with significant holdings in the industrial and logistics sectors, distinguishes itself through a defensive tenant base.
For the nine months ending December 31, 2025, over 80% of AIMS APAC REIT's rental income came from essential sectors like logistics, consumer staples, healthcare, and telecommunications.
As of December 31, 2025, the REIT reported a strong overall occupancy rate of 95.4% and a manageable leverage ratio of 36.6%.
AIMS APAC REIT currently provides a trailing yield of approximately 6.6%.
Its distribution per unit has remained stable over the past four years, a notable achievement amid rising interest rates and geopolitical challenges.
The key point is that a high yield backed by stability is particularly appealing.
CapitaLand China Trust — The Recovery Yield Narrative
This REIT is an intriguing option for investors who believe the market has not fully recognized its potential turnaround.
Currently, CapitaLand China Trust offers an annualized distribution yield of about 7.3%, which is elevated considering operational improvements seen in its full-year 2025 results.
The trust reported enhancements in its retail portfolio, including increased shopper traffic and tenant sales, alongside improved occupancy rates in its business parks.
However, rent reversions have generally been negative, and the distribution per unit has shown a declining trend.
Future performance may improve due to recent Chinese government initiatives aimed at stimulating domestic consumption.
Meanwhile, investors are compensated with a 7.3% yield and an undemanding valuation of around 0.65 times net book value while awaiting a potential recovery.
Stoneweg Europe Stapled Trust — The Cash Flow Resilient Trust
This European REIT, with 60% of its portfolio in industrial assets like logistics and data centers and 40% in prime commercial properties, may be undervalued by the market relative to its cash flow generation.
For the full year 2025, its net operating cash flow reached €86.7 million, a 22.6% year-on-year increase.
Stoneweg's tenant base is defensively strong, with 90% consisting of large multinational corporations and government or quasi-government entities.
Tenant diversity is also solid, with the largest tenant contributing only 3.9% of total rent, supporting stable recurring income and distributions.
As of December 31, 2025, the interest coverage ratio was adequate at 3.1 times.
Management expects distributions for FY2026 to align with FY2025's approximate €0.13365 per unit, implying a forward yield of about 8.9%.
Adding a margin of safety, Stoneweg currently trades at a price-to-book ratio of 0.76 times.
