Dividend yields up to 10% !
Looking for the best dividend stocks to buy in 2026 ? These top real estate investment trusts (REITs) might merit serious attention, says Royston Wild.
Posted by Royston Wild
Published 4 February
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.
Real estate investment trusts (REITs) can be an excellent way to target a long and lasting passive income. Dividends aren’t guaranteed, but they have qualities than can make them better income choices than most other UK shares.
Under REIT rules, companies must pay at least 90% of annual rental earnings out in dividends. This still leaves payouts sensitive to profits performance, but it also provides a higher level of income visibility for investors than most other stocks.
Should you buy Alternative Income REIT Plc shares today?
Despite ongoing uncertainties from Trump’s tariffs to global conflicts, Mark Rogers and his team believe many UK shares still trade at substantial discounts, offering savvy investors plenty of potential opportunities to learn about.
So what are the hottest REITs to buy right now. In my opinion, three of the hottest to consider are:
- Schroder European Real Estate Investment Trust
- Alternative Income REIT
- Regional REIT
Each of these property powerhouses offers a forward dividend yield of at least 10%. Want to know what makes them true dividend heroes?
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
Euro giant
Schroder European Real Estate Investment Trust holds a top-class portfolio of properties in continental hotspots. We’re talking about highly desirable cities with strong economies and infrastructure. Think Paris, Berlin, and Hamburg, to name a few of its locations.
It’s a winning strategy that leads to reliable rent collection and strong occupancy (portfolio occupancy was 97%, latest financials show). The trust’s exposure to different sectors like logistics, office, retail, and data centres also gives it strength.
The forward dividend yield here is 8.1%. I think it’s a top trust to consider, even though adverse currency movements could take a bite out of earnings.
Another diversified REIT
Like the Schroder trust, Alternative Income REIT takes a diversified approach to the property market. If anything, things are even more wild and wonderful — they range from hospitals and petrol stations, through to hotels, gyms, and thermal power plants.
Its rent collection is even higher, at 100%. And its tenants are locked down on ultra-long contracts, providing protection from (if not totally eliminating) cyclical pressures on rent collection. The weighted average unexpired lease term for its 23 tenants sits at 17 years.
With more than 92% of rental income linked to inflation, too, Alternative Income is in great shape to grow shareholder payouts. For 2026, the dividend yield is a brilliant 8.5%.
Double-digit yield
At 10%, Regional REIT is today the highest-yielding property trust on the London stock market. It carries greater risk than the other contenders we’ve looked at, reflecting its narrow exposure to the UK and broader weakness in the office market in which it specialises.
This has caused its share price to slump over the past year (down 10%). But is the bad news now baked into the trust’s share price? I think it might be. As well as having that enormous yield, Regional REIT trades at a 51% discount to its net asset value (NAV).
To my mind, it’s a top recovery share to consider. The REIT retains a high-quality portfolio, and is selling non-core assets to boost occupancy and repair the balance sheet. As for dividends, this year’s predicted payout is covered more than twice over by expected earnings, providing a wide margin of error.
SERE
Schroder European Real Estate Investment Trust PLC – London and Johannesburg-listed property investor – Dutch telecommunications company Koninklijke KPN NV formally terminates its lease at Schroder European Real Estate’s Apeldoorn property. KPN occupies this mixed-use office and data centre property in Netherlands, representing about 19% of the company’s portfolio income and 6% of portfolio value as at September 30, 2025. The lease termination will take effect from December 31, 2026. Early this month, Schroder European Real Estate Investment warned of the risk of maintaining its dividend following the departure of KPN.
Kepler View
As the board notes, alongside broader market factors, two specific factors play a role in Schroder European Real Estate’s (SERE) persistent discount. The largest tenant, KPN, has already provided verbal confirmation and is expected to formally confirm shortly its intention not to renew its lease, which expires in December 2026. We note that this is a large site that, aside from its current use, could be repositioned for residential development. But it’s current mixed use, particularly as a datacentre, are in an area which is seeing strong tenant demand across Europe.
We understand from the manager that there is a strong case to believe that the French tax claim will not be paid, and the board confirms that it has received professional advice on the same basis. Alongside this change, there is now a timetable for when we might expect a resolution, and as the board notes, there is an appeal process should the initial assessment go against SERE.
SERE’s significantly wider than average discount, c. 36% , says to us that the market is taking a wait and see approach on the above issues and while that’s frustrating given that there has been an improvement in sentiment to REITs more generally, with some of SERE’s UK-listed peers turning in very good share price performances over the last year, taking this approach is understandable given the binary nature of both issues. Once the outcome of either or both is known, then SERE’s remaining portfolio, which has maintained a relatively stable valuation and income, could be significantly undervalued by the share price.
Leave a Reply