Safe Rate refers to the amount of yield an investor will make should he decide to put his money in government issued bonds or fixed deposits instead of securities such as REITs. The term derives from the perception that instruments such as government issued bonds and fixed deposits are free from risk in comparison to riskier alternatives such as REITs and stocks.
Safe Rate is often discussed as a metric upon which a REIT's yield should be ahead of in order for the REIT to be considered an economically attractive proposition. For example when discussing the performance of REITs hosted across different countries, it will not be fair to base the comparison of these REITs based on its absolute yield alone. This is because different economies will have different Safe Rates. A REIT that pays a dividend of 8% in a country where the Safe Rate is 0.5% is said to be performing better that a REIT that pays a dividend of 10% in a country where the Safe Rate is 7%.
Before investing in REITs, especially so for REITs with large holdings of properties overseas, consider evaluating the performance of the REIT against the prevailing Safe Rate of the countries where the properties are resided. This will give you a much better feel of the REIT's performance rather than just relying on absolute yield figures alone.