Yahoo Finance 4 Singapore REITs That Pay a Sustainable Yield of 4.9% or More
Dividends are one of the best types of passive income you can enjoy.
Not only do they represent a tangible return on your investment, but they are also not taxed in the hands of the shareholder.
REITs are one of the best asset classes for consistent dividends as they are mandated to pay out at least 90% of their earnings as distributions to enjoy tax benefits.
Of course, it pays to be discerning when selecting a REIT to invest in.
It is preferable to select those with a great track record of distribution per unit (DPU) increases and are backed by a strong sponsor.
And when it comes to yield, it must be sustainable rather than merely high.
Here are four Singapore REITs that pay out a sustainable distribution yield of 4.9% or more.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, has a portfolio of 85 properties in Singapore and 56 in the US with total assets under management (AUM) of S$8.8 billion as of 31 March 2023.
MIT’s portfolio comprises data centres, business parks, and light industrial buildings, among others.
For its fiscal 2023 (FY2023) ending 31 March 2023, gross revenue rose 12.3% year on year to S$684.9 million.
Net property income (NPI) improved by 9.7% year on year to S$518 million.
DPU, however, dipped by 1.7% year on year to S$0.1357.
MIT’s units provide a trailing distribution yield of 6.1%.
There are indications that the industrial REIT can maintain or even raise its DPU.
Late last month, MIT announced its first acquisition in two years, that of a data centre in Osaka, Japan.
The purchase is expected to be accretive, raising FY2023’s DPU from S$0.01357 to S$0.1385.
The REIT has also completed its redevelopment project for Mapletree Hi-Tech Park @ Kallang and secured committed occupancy of 44.1% by net lettable area.
This asset is expected to contribute progressively from FY2024.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of ten suburban retail malls and an office building.
Total AUM is approximately S$6.9 billion as of 31 March 2023.
For its fiscal 2023’s first half (1H FY2023) ending 31 March, gross revenue climbed 6.5% year on year to S$187.6 million while NPI rose 5.7% year on year to S$138 million.
DPU remained flat year on year at S$0.0613 and annualised DPU stood at S$0.1226.
Units of FCT provide a forward distribution yield of 5.6%.
Back in January, FCT and its sponsor Frasers Property Limited (SGX: TQ5) announced the joint acquisition of a 50% stake in Nex Mall in Serangoon.
The retail REIT also acquired an additional 10% stake in Waterway Point Mall back in September last year.
These two acquisitions should help to boost rental income for the REIT.
Elsewhere, FCT also completed an asset enhancement initiative (AEI) at Tampines 1 that helped to add 8,000 square feet of net lettable area.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data centre REIT with a portfolio of 23 data centres located across nine countries.
Total AUM stood at S$3.7 billion as of 31 March 2023.
The REIT reported a commendable set of earnings for its fiscal 2023’s first quarter (1Q 2023).
Gross revenue increased by 6.5% year on year to S$70.4 million while NPI improved by 6.3% year on year to S$63.9 million.
DPU inched up 3% year on year to S$0.02541.
The annualised DPU of S$0.10164 means that Keppel DC REIT’s units provide a forward distribution yield of 4.9%.
Looking ahead, the REIT will focus on acquisitions to boost DPU while more than half of its leases contain built-in income and rental escalation clauses.
Data centre demand continues to be strong, underpinned by the adoption of cloud computing and digital transformation initiatives by corporations.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with 21 properties in Singapore, three in Australia, and two in Germany.
CICT’s total AUM stood at S$24.2 billion as of 31 December 2022.
The REIT’s 1Q 2023 business update displayed a promising set of financial numbers.
Gross revenue climbed 14.4% year on year to S$388.5 million with NPI rising by 11.3% year on year to S$276.3 million.
Back in 2022, CICT’s DPU came in at S$0.1058, giving its units a trailing distribution yield of 5.4%.
Shopper traffic for 1Q 2023 saw a 10.2% year on year increase while tenant sales jumped 26.7% year on year for its retail portfolio.
Its office performance was also strong with an occupancy rate of 94.8% and positive rental reversion of 4.2% for the quarter.
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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust and Keppel DC REIT.
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