REITs are traditionally known as income instruments that pay out a dependable dividend.
A REIT that seeks to grow its asset base over time may also raise its dividends over time.
And with higher distributions, unitholders in such REITs not only receive a more bountiful stream of passive income but also enjoy capital appreciation as the unit price rises.
Hence, a REIT investor can enjoy the best of both worlds — rising dividends and also a climbing unit price.
One way to look for suitable REITs to invest in is to monitor their unit price appreciation.
Such a rise may be indicative of positive corporate developments for the REIT, thereby making investors more optimistic about its prospects.
Here are five REITs that recorded double-digit returns thus far this year.
ESR-REIT (SGX: J91U)
ESR-REIT is an industrial REIT that owns a portfolio of 58 properties across Singapore.
The properties are in different sectors such as business parks, logistics, and general industrial and have an asset under management (AUM) of around S$3.2 billion as of 30 June 2021.
Year to date, ESR-REIT’s unit price has advanced by 20%.
The REIT reported a good set of numbers for its fiscal 2021 first half (1H2021).
Gross revenue inched up 5.4% year on year to S$119.8 million while net property income (NPI) increased by 8.4% year on year to S$87 million.
ESR-REIT’s distribution per unit (DPU) jumped by 14.3% year on year to S$0.01554.
The REIT recently announced a proposed merger with ARA Logos Logistics Trust (SGX: K2LU) to become the fifth-largest Singapore REIT by assets.
OUE Commercial REIT (SGX: TS0U)
OUE Commercial REIT, or OUECR, has a total AUM of S$5.8 billion as of 30 June 2021.
The REIT owns a diversified portfolio of seven properties in the commercial and hospitality space.
OUECR’s unit price has advanced by around 21.1% year to date to S$0.46.
For 1H2021, revenue dipped by 6% year on year to S$133.5 million while NPI slipped by 3.1% year on year to S$109 million.
DPU, however, increased by 23% year on year to S$0.0123 as the same period last year saw an amount of S$10.8 million retained because of the pandemic.
The REIT was recently included in the FTSE EPRA Nareit Global Real Estate Index series on 20 September 2021.
EC World REIT (SGX: BWCU)
EC World REIT is a Chinese logistics and e-commerce REIT with a portfolio of eight properties.
The REIT’s unit price has climbed by 14.1% since the start of this year.
For the second quarter of 2021 (2Q2021), EC World REIT reported that gross revenue inched up 1.2% year on year to S$31.2 million.
NPI increased marginally to S$27.9 million while DPU remained flat year on year at S$0.01532.
Aggregate leverage stood at 37.6% for the REIT as of 30 June 2021.
Occupancy remained very high at 99.1% and the REIT enjoyed stable income contribution across all sectors.
AIMS APAC REIT (SGX: O5RU)
AIMS APAC REIT owns a diversified portfolio of 28 industrial properties, of which 26 are located in Singapore and two are in Australia.
Year to date, the REIT’s unit price has climbed by 19% to S$1.50.
The REIT reported a sparkling set of numbers for 1H2021 with revenue, NPI and DPU increasing by double digits year on year.
Portfolio occupancy remained healthy at 97.3%, above Jurong Town Corporation’s industrial average of 90.1%.
AIMS APAC REIT signed 26 leases during its latest quarter amounting to 6.2% of its net lettable area.
The REIT’s leverage remained low at just 24.7% with the cost of debt at 2.8%.
Recently, the REIT acquired Woolworths HQ at S$454 million through a combination of debt financing and the issuance of perpetual securities.
This acquisition is expected to provide a 4.7% uplift to DPU.
Sabana REIT (SGX: M1GU)
Sabana REIT owns a diversified portfolio of 18 properties with an AUM of around S$900 million as of 30 June 2021.
The REIT’s unit price has surged by 22% year to date to S$0.44.
As of 30 September 2021, portfolio occupancy has improved to 85.3%, the highest since early 2018.
Rental reversion averaged 11% for the first nine months of 2021, and the REIT recently removed its Shari’ah compliance on 21 October.
Aggregate leverage stood at 34.8% as of 30 September 2021 with an average cost of debt of 3.3%.
The REIT’s new NTP+ mall has attained 100% occupancy since its opening in 2Q2021 and asset rejuvenation initiatives have also been undertaken at various properties to attract tenants.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
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