5 Singapore REITs with Strong Sponsors and Reliable Portfolios

REITs are a great asset class for income investors.

Their requirement to pay out at least 90% of their profits as distributions makes them perfect for dividend-seeking investors.

But as with any asset class, it pays to be discerning when you select the right REITs to include in your investment portfolio.

An attractive attribute for a REIT to have is a strong sponsor with a healthy pipeline of properties that can be injected into the REIT.

Investors should also look for REITs with robust portfolios that can weather economic storms.

Here are five REITs with the above characteristics.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties spread across eight countries.

The REIT’s assets under management (AUM) stood at S$13.3 billion as of 31 December 2023.

MLT has a strong sponsor in Mapletree Investments Pte Ltd, a global real estate firm that owns and manages S$77.4 billion of properties as of 31 March 2023.

The logistics REIT reported a respectable set of earnings for the first nine months of fiscal 2024 (9M FY2024) ending 31 December 2023.

Gross revenue edged up 0.2% year on year to S$552.9 million but net property income (NPI) dipped by 0.2% year on year to S$479.6 million.

Distribution per unit (DPU), however, inched up 0.7% year on year to S$0.06792.

As a testament to the strong demand for its properties, MLT reported a high portfolio occupancy of 95.9% and also saw a positive rental reversion of 3.8% for its latest quarter.

Frasers Logistics & Commercial Trust (SGX: BUOU)

Frasers Logistics & Commercial Trust, or FLCT, is a logistics and commercial REIT with a portfolio of 108 properties spread across Singapore, Australia, the UK, Germany, and the Netherlands.

The portfolio was worth S$6.7 billion as of 31 December 2023.

FLCT has a solid sponsor in Frasers Property Limited (SGX: TQ5), a property developer which has total assets of S$40.1 billion as of 31 March 2023.

The REIT reported a downbeat set of earnings for its fiscal 2023 (FY2023) ending 30 September 2023.

Revenue fell by 6.5% year on year to S$420.8 million while NPI tumbled by 9% year on year to S$311.4 million.

DPU also fell in line with NPI, dipping by 7.6% year on year to S$0.0704.

For its recent fiscal 2024 first quarter, the REIT reported a high occupancy rate of 95.8% along with a strong positive rental reversion of 18.2%.

Keppel DC REIT (SGX: AJBU)

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

Its portfolio was worth S$3.7 billion as of 31 December 2023.

Keppel DC REIT has a reputable sponsor in blue-chip asset manager Keppel Ltd (SGX: BN4).

The REIT saw gross revenue for 2023 inch up 1.4% year on year to S$281.2 million but DPU fell by 8.1% year on year to S$0.09383 because of a provision made for a Chinese tenant.

Despite this, the data centre REIT reported a very high portfolio occupancy of 98.3%, demonstrating the strong demand for its properties.

CapitaLand Integrated Commercial Trust (SGX: C38U)

CapitaLand Integrated Commercial Trust, or CICT, owns a portfolio of retail and commercial assets worth S$24.5 billion as of 31 December 2023.

Its portfolio comprises 21 properties in Singapore, two properties in Germany, and three in Australia.

CICT’s sponsor is CapitaLand Investments Limited (SGX: 9CI), a real estate investment manager with S$134 billion of AUM and S$100 billion of funds under management as of 31 December 2023.

The REIT reported a solid performance for 2023 with gross revenue rising 8.2% year on year to S$1.6 billion.

NPI increased by 7% year on year to S$1.1 billion while DPU inched up 1.6% year on year to S$0.1075.

Like the REITs above, CICT also sported a high portfolio occupancy of 97.3%.

Its retail portfolio saw a positive rental reversion of 8.5% while its commercial portfolio enjoyed a positive rental reversion of 9%.

CapitaLand Ascendas REIT (SGX: A17U)

CapitaLand Ascendas REIT, or CLAR, is Singapore’s oldest industrial REIT with a portfolio of 232 properties in Singapore, the US, Europe, and Australia.

Its AUM stood at S$16.9 billion as of 31 December 2023.

Like CICT, CLAR’s sponsor is also CapitaLand Investment Limited.

The industrial REIT posted a mixed set of earnings for 2023.

Gross revenue increased by 9.4% year on year to S$1.5 billion with NPI increasing by 5.6% year on year to S$1 billion.

DPU, however, tumbled by 4% year on year to S$0.1516 because of a 2.7% year-on-year increase in the number of issued units.

Portfolio occupancy stood high at 94.2% with an impressive positive rental reversion of 13.4% across the portfolio.

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

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