Yahoo Finance 4 Singapore REITs That Are Perfect for Your CPF Investment Account
Singapore’s Central Provident Fund (CPF) system helps you to save up for your retirement.
The Ordinary Account (OA) carries an interest rate of 3.5% on the first S$20,000 with a 2.5% interest rate on the remaining amount.
While this interest is almost risk-free, investors may be looking at a better return on their CPF savings.
REITs are a great asset class for obtaining a better yield and you can use your CPF Investment Account (IA) to invest your OA balance.
We profile four Singapore REITs that will be great for growing your CPF OA account.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties across eight countries with assets under management (AUM) of S$13.3 billion as of 31 December 2023.
The REIT is managed by a wholly-owned subsidiary of Mapletree Investments Pte Ltd (MIPL), which also acts as a strong sponsor that can introduce a pipeline of assets for MLT to acquire.
MIPL owns and manages S$77.4 billion of real estate assets across office, retail, industrial, and other asset classes as of 31 March 2023.
For the first nine months of fiscal 2024 (9M FY2024) ending 31 December 2023, MLT saw gross revenue inch up 0.2% year on year to S$552.9 million.
Net property income (NPI) dipped 0.2% year on year to S$479.6 million but distribution per unit (DPU) edged up 0.7% year on year to S$0.06792.
The logistics REIT’s annualised DPU is S$0.09056, giving its units an annualised distribution yield of 6%.
MLT sported a high portfolio occupancy of 95.9% along with a positive rental reversion of 3.8% for the quarter, demonstrating continued strong demand for its portfolio of properties.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT is a healthcare REIT with a portfolio of 63 properties with an AUM of S$2.2 billion as of 31 December 2023.
The portfolio comprises three Singapore hospitals, 59 nursing homes in Japan, and strata-titled lots in the MOB Specialist Centre in Kuala Lumpur.
Parkway Life REIT has a strong sponsor in IHH Healthcare Berhad (SGX: Q0F), a diversified healthcare player that owns hospitals and clinics under brands such as Parkway, Pantai, and Acibadem in Singapore, Malaysia, and Turkey.
The REIT announced a strong set of earnings for 2023 and continued its uninterrupted core DPU increase since its listing.
For 2023, gross revenue increased by 13.5% year on year to S$147.5 million while NPI rose 14.1% year on year to S$139.1 million.
DPU inched up 2.7% year on year to S$0.1477, giving its units a historical distribution yield of 4%.
Looking ahead, the REIT enjoys income certainty with the lease renewal terms of 20.4 years for its Singapore hospitals till 31 December 2042.
The healthcare REIT also has the right of first refusal over a quality asset, Mount Elizabeth Novena Hospital, for 10 years, that could be injected into the REIT in the future.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with 21 properties in Singapore, two in Germany, and three in Australia.
The REIT’s AUM stood at S$24.5 billion as of 31 December 2023.
CICT is managed by a wholly-owned subsidiary of CapitaLand Investment Limited (SGX: 9CI), or CLI, which is also its sponsor.
CLI is a real estate behemoth with S$133 billion of AUM and S$90 billion of funds under management as of 30 September 2023.
The REIT released a resilient set of earnings for 2023 with gross revenue rising 8.2% year on year to S$1.6 billion.
NPI rose 7% year on year to S$1.1 billion and DPU inched up 1.6% year on year to S$0.1075.
At a unit price of S$1.91, CICT offers a trailing distribution yield of 5.6%.
CICT possessed strong operating metrics with a portfolio committed occupancy of 97.3%.
It also reported positive rent reversion of 8.5% and 9% for its retail and office divisions, respectively.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of 10 retail malls and an office building all located in Singapore.
The REIT’s AUM stood at around S$6.9 billion as of 30 September 2023.
Investors should be pleased to note that FCT has a strong sponsor in Frasers Property Limited (SGX: TQ5), or FPL.
FPL is a multinational investor, developer, and manager of real estate products and services with total assets of approximately S$39.8 billion as of 30 September 2023.
FCT posted a respectable set of earnings for its fiscal 2023 (FY2023) ending 30 September 2023.
Revenue increased by 3.6% year on year to S$369.7 million with NPI inching up 2.7% year on year to S$265.6 million.
DPU, however, slid 0.6% year on year to S$0.1215.
FCT’s units provide a trailing distribution yield of 5.5% at a unit price of S$2.22.
The REIT continued to report strong operating metrics for the quarter ending 31 December 2023.
Retail portfolio committed occupancy stood high at 99.9% with shopper traffic increasing by 3.1% year on year.
FCT recently increased its stake in NEX Mall in Serangoon which should help it to boost its DPU and position it for further growth in the years ahead.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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