Receiving a dividend always brings a smile to my face.
As you are reading this article, I am sure it does the same for you too.
REITs qualify as an effective income instrument as they need to pay out 90% of their earnings as distribution to enjoy tax benefits.
However, not all REITs are built the same.
Of the various categories, industrial REITs have proven to be the most resilient during the pandemic.
Here are four that are yielding 4.7% or higher.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, owns a total of 143 properties valued at S$8.6 billion as of 31 December 2021.
A little over half of its portfolio consists of data centres while the remainder is made up of flatted factories, business park buildings, and light industrial buildings.
The REIT has grown by leaps and bounds over the years, more than tripling its assets under management (AUM) from S$2.2 billion in fiscal 2011 (FY2011) to its current S$6.8 billion.
For its fiscal 2022 third quarter (3Q2022), portfolio occupancy stood at 93.6% and MIT’s weighted average lease expiry (WALE) by gross rental income (GRI) was 4.2 years.
For the first nine months of FY2022 (9M2022), gross revenue rose 36.7% year on year to S$445.9 million while net property income (NPI) climbed by 34.2% year on year to S$347.8 million.
Distribution per unit (DPU) increased by 11.5% year on year to S$0.1031.
Trailing 12-month DPU stood at S$0.1361, giving the REIT’s units a trailing dividend yield of 5.1%.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, owns a portfolio of 167 logistics properties in eight countries with an AUM of S$11.5 billion as of 31 December 2021.
The REIT reported a robust set of earnings for 9M2022, with gross revenue up 22.7% year on year to S$495.7 million.
NPI jumped by 20% year on year to S$435 million while DPU inched up by 5.7% year on year to S$0.06519.
Trailing 12-month DPU stood at S$0.0868, giving MLT’s units a trailing distribution yield of 4.7%.
The logistics REIT enjoyed high occupancy of 97.8% as of 31 December 2021 and saw a positive rental reversion of 2.5%.
MLT continues to grow its portfolio through acquisitions, and it just announced the acquisition of a newly-built ramp-up logistics property in South Korea last month for around S$100.3 million.
ESR-REIT (SGX: J91U)
ESR-REIT owns a diversified portfolio of 56 properties in Singapore with a total AUM of S$3.2 billion as of 31 December 2021.
For its fiscal 2021 (FY2021) earnings, gross revenue edged up 5% year on year to S$241.3 million while NPI rose 5.5% year on year to S$173.3 million.
DPU increased by 6.7% year on year to S$0.02987.
ESR-REIT’s trailing distribution yield stood at 7.2% at the last traded price of S$0.415.
The REIT has a gearing ratio of 40% as of 31 December 2021 and a cost of debt of 3.3%.
Last October, ESR-REIT and ARA Logos Logistics Trust (SGX: K2LU) announced a merger that was just approved earlier this week.
The combined entity will be named “ESR-Logos REIT” and is set to become the fifth-largest industrial REIT by assets.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, owns a total of 102 properties worth S$7.3 million as of 31 December 2021.
Of these properties, 96 are industrial ones and the remaining six are CBD commercial or business parks; and are spread out across five countries — Singapore, Germany, Australia, the UK and the Netherlands.
The occupancy rate remained high at 95.9% with a WALE of 4.7 years based on GRI.
For its fiscal 2021 ended 30 September 2021, FLCT reported a 41.4% year on year jump in revenue to S$469.3 million.
Adjusted NPI rose 37.5% year on year while DPU increased by 7.9% year on year to S$0.0768.
FLCT’s units provide a trailing 12-month distribution yield of 5.3% at the last traded unit price of S$1.44.
Aggregate leverage stood at 34.3% as of 31 December 2021, offering debt headroom of around S$2.3 billion for the REIT to conduct acquisitions.
The industrial and commercial REIT enjoyed a low cost of debt of 1.6% and a high interest coverage ratio of 8.4 times.
FLCT recently completed the acquisition of land to be developed into a prime warehouse in the UK, while also divesting Cross Street Exchange in Singapore at a 28% premium to the property’s book value.
Not sure which REIT to put your money in? Use our 7-step REIT checklist to find one that fits into your retirement plan. Checklist is inside our latest FREE report “Singapore REITs Retirement Plan”. Click here to download it now.
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Disclaimer: Royston Yang owns shares of Mapletree Industrial Trust and Frasers Logistics & Commercial Trust.
