4 Singapore REITs with Dividend Yields Higher Than the CPF Ordinary Account and Singapore Savings Bonds

Singapore’s Central Provident Fund (CPF) has done a great job in building up Singaporeans’ retirement savings.

However, the interest rate on the CPF Ordinary Account (OA) is just 2.5% and is insufficient to beat the current core inflation rate of 3.6% logged in February 2024.

You could turn to Singapore Savings Bonds or SSB.

However, this risk-free investment has also seen its interest rate fall to 2.88% and cannot keep up with inflation.

There is good news, though.

We showcase four Singapore REITs with distribution yields that exceed both the CPA OA and SSB that you can consider adding to your portfolio.

Frasers Logistics & Commercial Trust (SGX: BUOU)

Frasers Logistics & Commercial Trust, or FLCT, has a portfolio of 108 properties across Singapore, the Netherlands, Germany, Australia, and the UK.

The portfolio’s assets under management stood at S$6.7 billion as of 31 December 2023.

For its fiscal 2023 (FY2023) ending 30 September 2023, FLCT saw revenue dip by 6.5% year on year to S$420.8 million.

Adjusted net property income (NPI) fell by 9% year on year to S$311.4 million while distribution per unit (DPU) declined by 7.6% year on year to S$0.0704.

FLCT’s units provide a trailing distribution yield of 6.6%.

The logistics & commercial REIT provided a robust update for its fiscal 2024 first quarter (1Q FY2024).

The portfolio witnessed strong positive rental reversions of 18.2% while maintaining a high occupancy rate of 95.8%.

With the aggregate leverage at just 30.7%, the REIT has a significant debt headroom of S$1.1 billion to reach 40%.

Earlier this month, FLCT announced the acquisition of four industrial properties in Germany from its sponsor, Frasers Property Limited (SGX: TQ5).

The acquisition, which is DPU-accretive, will increase FLCT’s gearing to around 32.5%.

CapitaLand Ascendas REIT (SGX: A17U)

CapitaLand Ascendas REIT, or CLAR, is Singapore’s largest industrial REIT with a portfolio of 232 properties worth S$16.9 billion as of 31 December 2023.

CLAR reported a mixed set of results for 2023 with gross revenue rising 9.4% year on year to S$1.5 billion.

NPI increased by 5.6% year on year to S$1 billion.

However, DPU slipped by 4% year on year to S$0.1516 because of higher finance costs and an increase in the number of issued units.

CLAR’s units offer a trailing distribution yield of 5.5%.

Despite the lower DPU, the industrial REIT reported a high portfolio occupancy rate of 94.2%.

It also saw a positive rental reversion of 13.4% for the year.

Its property portfolio also enjoyed a 3% year-on-year increase in valuation to S$16.9 billion.

CLAR currently has five ongoing projects to improve its portfolio quality worth around S$551 million.

Mapletree Industrial Trust (SGX: ME8U)

Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 56 properties in the US, 85 in Singapore, and one in Japan.

Its AUM stood at S$9.2 billion as of 31 December 2023.

MIT reported a mixed set of earnings too for its fiscal 2024’s third quarter (3Q FY2024) ending 31 December 2023.

Gross revenue improved by 2% year on year to S$173.9 million while NPI inched up 0.8% year on year to S$129.9 million.

DPU, however, slipped by 0.9% year on year to S$0.0336.

MIT’s trailing 12-month DPU came in at S$0.134, giving its units a trailing distribution yield of 5.8%.

The REIT enjoyed positive rental reversions across all its property segments.

Its aggregate leverage stood at 38.6% with an all-in average cost of debt of 3.1%.

Close to 80% of the REIT’s loans are on fixed rates, helping it to mitigate some of the headwinds from higher interest rates.

Keppel DC REIT (SGX: AJBU)

Keppel DC REIT is a data centre REIT with a portfolio of 23 data centres across nine countries.

Its AUM stood at S$3.7 billion as of 31 December 2023.

2023 saw a downbeat financial performance by the REIT as one of its tenants, Bluesea, was in arrears.

Although gross revenue for the year increased by 1.4% year on year to S$281.2 million, NPI slipped by 0.3% year on year to S$245 million.

The surge in finance costs caused the data centre REIT’s DPU to fall by 8.1% year on year to S$0.09383.

Keppel DC REIT’s trailing distribution yield stood at 5.5%.

Although DPU was lower, the REIT maintained an impressive occupancy rate of 98.3% along with a long portfolio weighted average lease expiry of 7.6 years.

With an aggregate leverage of just 37.4% and around S$2 billion of potential assets for acquisition, investors can look forward to possible DPU-accretive acquisitions soon.

In our latest report, we dive into five standout Singapore REITs offering distribution yields exceeding 5.5%. Why settle for less? Get more dividends hitting your bank account with our REITs guide. Click here to download for free now.

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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust, Frasers Logistics & Commercial Trust and Keppel DC REIT.

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