Unlock £1,088 in Passive Income with These Two Top REITs

If you’re looking to build a reliable passive income stream this June, real estate investment trusts (REITs) remain one of the most attractive options. Because REITs are required by law to pay out at least 90% of their profits as dividends, they often provide investors with better visibility on income than many other dividend stocks. Right now, two REITs have caught my eye for their combination of solid yields and long-term potential and together, a £15,000 investment could deliver around £1,088 in dividends this year.

The first is the Schroder European Real Estate Investment Trust (SERE). This trust holds a carefully selected portfolio of commercial properties across some of Europe’s most promising cities, including locations in France, Germany, and the Netherlands. What stands out is that it currently trades at a significant discount about 31.5% below its net asset value which makes it an interesting value opportunity. While economic headwinds and geopolitical tensions are risks, the steady inflation picture in the Eurozone offers some comfort, and the trust’s dividend yield reflects a healthy income potential.

The second is Primary Health Properties (PHP), which I consider one of the more secure income-focused REITs on the market. PHP invests in healthcare facilities like GP surgeries and medical centres across the UK and Ireland. With nearly 90% of its rental income supported by government bodies, its earnings are backed by a strong and defensive sector. Given the growing demand on healthcare systems and the government’s push to ease pressure on hospitals, PHP’s assets have a vital role to play. The trust’s current valuation, below book value with a price-to-book ratio under 1, suggests it could offer a margin of safety along with a dependable dividend.

By allocating £7,500 to each of these trusts, investors could realistically expect to receive over £1,000 in dividend income this year all while benefiting from exposure to two very different but complementary sectors. Of course, like any investment, risks remain, particularly related to interest rates and policy shifts, but the fundamentals here are encouraging.

In summary, these two REITs represent a balanced approach to generating passive income: one focusing on growth and value in European commercial property, the other on income stability in healthcare real estate. For investors aiming to build or enhance a dividend portfolio, they deserve a closer look this June.

As always, this is not financial advice but information to help you explore your options. Be sure to do your own research and consult a professional before making investment decisions.