3 Singapore REITs That Are Poised to Declare Dividends This Month

With the earnings season in full swing, income investors will be keeping a close eye on dividend-paying stocks.

The REIT sector has proven to be a reliable source of dividends as REITs need to pay out at least 90% of their net profit as distributions to enjoy tax benefits.

Of late, REITs have been under pressure as the combination of surging interest rates and high inflation has dampened sentiment for the sector.

Despite these headwinds, investors can still expect solid, well-managed REITs to report healthy distributions.

We profile three Singapore REITs that will be announcing distributions this October when they release their financial results.

Frasers Centrepoint Trust (SGX: J69U)

Frasers Centrepoint Trust, or FCT, is a suburban retail REIT with a portfolio of 10 Singapore retail properties and one office property.

These properties had an asset under management (AUM) of S$6.9 billion.

For the first half of its fiscal 2023 (1H FY2023) ending 31 March 2023, FCT saw its gross revenue rise 6.5% year on year to S$187.6 million.

The retail REIT’s NPI for 1H FY2023 increased by 5.7% year on year to S$138 million.

Distribution per unit (DPU) remained flat year on year at S$0.0613.

FCT will be releasing its results for FY2023 ending 30 September 2023 in the morning of 25 October, before trading commences.

As a recap, the REIT paid out a DPU of S$0.06091 for the second half of fiscal 2022 (2H FY2022).

FCT’s malls are well-connected to transport nodes and hubs, thus ensuring a consistent flow of visitors.

As of 30 June 2023, the retail portfolio’s committed occupancy stood high at 98.7%.

For the quarter, shopper traffic also grew by 16% year on year with tenant sales improving by 5% year on year.

FCT’s aggregate leverage stood at 40.2% as of 30 June 2023 but is projected to decline to 37.1% as the REIT manager has announced the divestment of Changi City Point.

The REIT has also commenced work on an asset enhancement initiative (AEI) for Tampines 1 in 2Q 2023 with more than 90% of AEI spaces being pre-committed to date.

As part of its capital recycling strategy, the manager announced that it will sell 143.9 million shares of Hektar REIT (KLSE: 5121), taking its stake down from 30.97% to 2.12%.

The gross proceeds will amount to around S$37.4 million.

FCT will dispose of this remaining stake in due course.

Mapletree Industrial Trust (SGX: ME8U)

Mapletree Industrial Trust, or MIT, is an industrial REIT with 141 properties across Singapore and the US.

The REIT boasts more than 2,000 tenants and had an AUM of S$8.8 billion as of 30 June 2023.

MIT reported its fiscal 2024 first quarter (1Q FY2024) results back in July which saw a mixed performance.

Gross revenue inched up 1.7% year on year to S$170.6 million with NPI edging up 0.7% year on year to S$130.8 million.

DPU, however, slid 2.9% year on year to S$0.0339 because of higher borrowing costs and a slightly larger base of units.

Investors will be curious to know if MIT can sustain its DPU going into 2Q FY2024.

Results are slated for release on 25 October after market close.

The REIT saw positive rental reversions across most property segments in 1Q FY2024 and announced a successful private placement in May this year.

The industrial REIT has also concluded the acquisition of an Osaka data centre for S$505.9 million late last month.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust, or MLT, owns a portfolio of 193 properties across eight countries with assets under management of S$13.5 billion as of 30 June 2023.

Similar to MIT, MLT also reported a mixed set of earnings for 1Q FY2024.

Gross revenue dipped by 2.9% year on year to S$182.2 million with NPI slipping 3.1% year on year to S$158.1 million.

DPU, however, crept up 0.1% year on year to S$0.02271.

The REIT’s performance was impacted by weaker exchange rates as well as higher borrowing costs.

Investors will be closely watching MLT’s performance for 2Q FY2024 when it is released on 24 October.

The REIT pays out a quarterly DPU but investors will scrutinise its rental reversion rate and all-in borrowing cost.

They may also be curious as to whether the REIT manager will continue to apply the distribution reinvestment plan for 2Q FY2024’s DPU.

For 1Q FY2024, portfolio occupancy stood high at 97.1% with aggregate leverage at 39.5%.

The logistics REIT reported a positive rental reversion of 4.2% for the quarter.

With the acquisition of eight properties completed back in April to June for S$904.4 million, there could be an upside to the REIT’s DPU.

The REIT also has an ongoing AEI with the redevelopment of 51 Benoi Road in Singapore that will be completed in the first quarter of 2025.

Not sure which REIT to put your money in? Use our 7-step REIT checklist to find one that fits into your retirement plan. Checklist is inside our latest FREE report “Singapore REITs Retirement Plan”. Click here to download it now.

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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust.

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