Why Josh Liaw thinks building a UK REIT on government risk is safer than chasing the market’s obsession with yield

“How They See It” is where we delve into the minds of those shaping the future of today’s most dynamic companies. In this instalment, we speak with Josh Liaw, CEO of Elite UK REIT. He shares his perspective on why government-backed assets remain the most resilient foundation for long-term returns, how diversification into student housing and data centres strengthens that base, and what it means to build a portfolio that balances disciplined capital management with genuine social purpose.

“I never imagined that my work would be so intimately tied to the social fabric of the United Kingdom. Yet here I am, leading a REIT that owns Jobcentres, government workspaces, and soon, student accommodation and data centres. At first glance, these are just assets on a balance sheet. But to me, they represent something deeper — the infrastructure that holds communities together.

Elite UK REIT is in many ways an anomaly. We are the only UK REIT listed in Singapore and Asia, traded in pound sterling, and offering direct exposure to UK government-backed income streams. More than 99 per cent of our rental income comes from the UK Government, with leases signed with Crown bodies. Credit strength is sovereign and AA-rated, rent is paid in advance, and arrears are non-existent. For investors, that stability is compelling. For me, it’s also personal reassurance — government risk, I believe, remains the best risk there is.

But stability cannot be mistaken for stagnation. While our core portfolio of government-leased properties remains the bedrock, we are also diversifying with purpose. In Dundee, Lindsay House will be converted into a 168-bed student housing project, expected to be operational by 2027. That single development says a lot about how I see our future. Purpose-built student accommodation addresses a structural undersupply while generating strong yields. More importantly, it fits naturally into our identity. Just as Jobcentres connect people to employment, well-located student housing supports education and upward mobility. Both are essential infrastructure.

I have always believed that it is possible to achieve strong yields while delivering positive social outcomes. Today, our 149-asset portfolio generates resilient government-backed cashflow at an attractive 8 to 9 per cent yield, with the Department for Work and Pensions as our key occupier. The DWP alone serves 24 million claimants and disburses more than £265 billion in benefits annually. That reach is humbling. And with Dundee, we extend the same philosophy to the next generation of students — housing that doesn’t just put a roof over their heads, but enables them to pursue opportunities that will change their lives.

Looking ahead, I see our properties evolving in step with the government’s own transformation. In past lease regearing, we committed £15 million to sustainability upgrades in partnership with government occupiers, reducing their occupation costs while lowering our financing costs. Now, as the UK shifts towards integrated, citizen-focused service hubs, I see our spaces becoming more than single-use offices. Imagine “Live Well Centres” that bring together employment, health, and community services under one roof. Our role is to provide the adaptable, sustainable platform that makes this evolution possible.

Of course, none of this comes without risk. One of the most underappreciated risks in the REIT space is execution and management quality. Having a leadership team fully aligned with unitholders is essential. At Elite, we achieve that alignment by tying management’s long-term incentives directly to unit price performance and strategic KPIs, and by structuring our fees around a percentage of distribution income. If unitholders are not rewarded, neither is management. That discipline matters, especially when temptations exist to chase short-term gains at the expense of long-term resilience.

Since I joined in mid-2023, we have grown distributions, but never at the cost of discipline. That sometimes means holding vacant assets while exploring the best path forward, or recycling capital from non-core properties into higher-yielding opportunities. Investors often want quarterly results to tell the whole story. I understand that. But real stewardship is generational. It asks whether our portfolio will remain resilient and relevant ten years from now, not just whether the next dividend payment looks attractive.

The way I see it, real estate is never only about financial returns. It’s about how communities function and thrive. From Jobcentres that connect people to work, to government offices that deliver essential services, and now to student housing that fosters mobility, our assets touch lives every day. We are capital allocators, yes, but we are also civic partners.

If our legacy is that we delivered stable returns with integrity, and at the same time left communities stronger, more connected, and better served, then I would consider our mission fulfilled. My hope is that Elite UK REIT will be remembered as the REIT that proved disciplined capital management and social purpose can — and should — coexist.”