If you build your Singapore REIT portfolio around the FTSE ST All-Share REIT Index — the benchmark most income investors use, and one that even REITs like Starhill Global REIT measure themselves against — there's a good chance you've never seriously looked at United Hampshire US REIT (SGX: ODBU). That's the problem.
UHREIT currently trades with a dividend yield in the 8% to 9% range, well above the broader S-REIT sector average of roughly 6–7%. For a market where investors chase every extra point of yield, that should put it on every income watchlist. Instead, it sits largely off the radar — and the index is a big reason why.
UHREIT is Singapore-listed, but its entire property portfolio sits in the United States. Its tenants are grocery-anchored and necessity-based retail: strip malls and centres anchored by supermarkets and pharmacies, leased to tenants considered resilient to e-commerce — restaurants, home improvement chains, fitness centres, warehouse clubs. This has kept its income relatively stable even as its unit price has lagged, ironically property revenue has been increasing year on year because of built in annual rental escalations and long WALE.
So Why Isn't It in the Index?
Here's the part that should give investors pause: it's not earnings, tenant quality, or balance sheet stress keeping UHREIT out. It's trading liquidity.
FTSE Russell's index methodology screens for free float and trading liquidity, not just market cap, to ensure constituents can be bought and sold at scale without distorting the price. UHREIT's smaller free float and thin daily turnover don't clear that bar. And low turnover is self-reinforcing: less liquidity means less index eligibility, which means less visibility, which means even less turnover.
This is a structural quirk, not a quality signal — plenty of REITs sit outside passive index flows for reasons unrelated to their underlying fundamentals. But because so many Singapore income investors use index membership as a shortcut for "is this REIT worth considering," UHREIT ends up invisible to the very crowd hunting for higher yield.
The Cost of the Blind Spot
REIT ETFs that track the index never buy a single unit of UHREIT, no matter how attractive the yield gets, simply because the rules exclude it. Investors who use "is it in the benchmark" as a screen filter it out before ever checking the lease structure or payout coverage. REITs that benchmark themselves against the index never have to stack up against UHREIT's payout, because it isn't part of the comparison set. The result: capital flows toward index members partly because they're index members — not purely because they're the best income vehicles on the exchange. Singapore investors and fund manager lose out on the extra yield and opportunity to outperform Singapore REIT index any time or date of the year.
The Takeaway
If your approach to REIT investing starts and ends with "what's in the index," you may be filtering out some of the highest-yielding options on a technicality that has nothing to do with income quality.
That doesn't mean buy blind, though. Worth noting: UHREIT's illiquidity isn't a case of a thin order book or wide spreads — there's decent volume sitting on both the bid and ask at most price levels. The "low liquidity" here is really low daily turnover, not a shallow market, which is a more benign form of illiquidity. Still, size positions sensibly and do your own homework on debt maturities, occupancy, and currency risk first. But if you've never considered UHREIT simply because "it's not in the REIT index," that's a gap worth closing — the index is a tool, not a verdict.
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