5 REITs Reporting Higher DPU in January

After a tough 2020, this year promises to offer some respite to embattled REITs.

Investors are expecting 2021 to be a year of recovery as COVID-19 vaccines are being disseminated around the world.

More and more people are being inoculated as each day passes.

As conditions improve, lockdowns and border closures will eventually be lifted.

In tandem, income-seeking investors are rejoicing as some REITs have reported better numbers for their fiscal 2020 earnings.

Here are five REITs that saw a year on year rise in distribution per unit (DPU).

Keppel REIT (SGX: K71U)

Keppel REIT owns a portfolio of grade A commercial assets in key business districts within Asia.

The REIT has assets under management (AUM) of over S$8 billion in Singapore, Australia and South Korea.

With commercial property being a resilient asset class, Keppel REIT has announced a sturdy set of financial numbers.

For the fiscal year 2020, rental income rose 3.8% year on year to S$170.2 million, while net property income (NPI) attributable to unitholders rose 5.8% year on year to S$118.5 million.

DPU inched up 2.7% year on year to S$0.0573, giving the REIT a trailing dividend yield of around 4.9%.

The REIT has been active on the acquisition front after announcing two acquisitions in December last year.

One was for Pinnacle Office Park in Sydney and was completed at end-December, while the other is the proposed acquisition of Keppel Bay Tower for S$657.2 million which is expected to close by the second quarter of 2021.

Soilbuild Business Space REIT (SGX: SV3U)

Soilbuild Business Space REIT’s portfolio comprises business parks and industrial properties located in Singapore and Australia.

The portfolio contains 10 properties in Singapore and three in Australia with a total net lettable area of 3.8 million square feet as of 31 December 2020.

For the fourth quarter of 2020, the REIT reported higher gross revenue and NPI, increasing by 5.4% and 10.1% year on year, respectively.

DPU for the quarter surged 29.1% year on year to S$0.01194.

Full-year 2020 DPU was, however, down by 7.1% year on year to S$0.03922 due to the effects from COVID-19.

Soilbuild REIT’s trailing dividend yield stands at 7.3%.

Sabana REIT (SGX: M1GU)

Sabana REIT owns a portfolio of 18 properties in Singapore in the high-tech industrial, warehouse and logistics, and general industrial sectors.

For the second half of 2020, gross revenue and NPI declined by 5.5% and 11.7% year on year due to lower contribution from one of the REIT’s properties (10 Changi South Street 2) and impairment losses from receivables owed by distressed tenants.

However, DPU surged 47.7% year on year due to rollover adjustments from prior years and distribution released from the first half of 2020.

Moving forward, the REIT manager is optimistic on the opening of the REIT’s new NTP+ mall, with completion on track for the first quarter of this year.

Parkway Life REIT (SGX: C2PU)

Parkway Life REIT is a healthcare REIT that owns a portfolio of 54 properties consisting of three hospitals in Singapore, 50 high-quality nursing home and care facilities in Japan, and strata-titled units in MOB Specialist Clinics Kuala Lumpur in Malaysia.

The REIT reported a solid set of earnings for its full-year 2020.

Gross revenue rose 4.9% year on year to S$120.9 million and NPI increased by 4% year on year to S$112.5 million.

DPU climbed by 4.5% year on year to S$0.1379.

The REIT has an enviable track record of 13 consecutive years of year on year DPU increases.

Annualised DPU back in 2007 stood at S$0.0632, and DPU has more than doubled since then to the current S$0.1379.

The REIT is not done growing, as it recently announced the acquisition of a nursing home in Japan for S$21.2 million.

Parkway Life REIT’s trailing dividend yield stands at around 3.4%.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust, or MLT, owns a portfolio of 156 logistics assets in countries such as Singapore, Hong Kong, Japan, China and Vietnam.c

As of 31 December 2020, AUM stands at S$10.2 billion.

For the REIT’s fiscal 2021 third quarter, it reported a 15.5% year on year rise in gross revenue.

NPI jumped by 15% year on year to S$124.7 million, while DPU inched up 1% year on year to S$0.02065 due to an enlarged unit base.

The REIT’s portfolio occupancy remains stable at 97.1% as of 31 December 2020.

Unitholders should note that the REIT had just concluded its billion-dollar acquisition of 25 logistics properties from China, Japan, Vietnam and Australia.

These properties should continue to contribute to NPI and DPU moving into the calendar year 2021.

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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.

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