The REIT sector is seeing some respite from persistently high interest rates and surging inflation.
Singapore’s core inflation rate fell to its lowest in four years for February 2025 at just 0.6%, below the 0.8% logged in the previous month.
Interest rates have also been reduced by a full percentage point in 2024 and the US Federal Reserve is pencilling in two potential rate cuts for 2025.
The industrial REIT sub-sector has demonstrated resilience as demand for e-commerce and logistics remained strong.
Here are four Singapore industrial REITs displaying attractive distribution yields of 5.7% or more.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 183 properties spread across eight countries.
The blue-chip REIT had total assets under management (AUM) of S$13.4 billion as of 31 December 2024.
MLT reported a lacklustre set of earnings for the first nine months of fiscal 2025 (9M FY2025) ending 31 December 2024.
Revenue dipped 1% year on year to S$547.4 million while net property income (NPI) fell 1.5% year on year to S$472.5 million.
Distribution per unit (DPU) tumbled 10.2% year on year to S$0.06098, primarily because of higher finance costs and a lower divestment gain recorded for 9M FY2025.
The logistics REIT’s trailing 12-month DPU stood at S$0.08309, giving its units a trailing distribution yield of 6.3% at a unit price of S$1.32.
Despite the fall in DPU, MLT maintained a high portfolio occupancy rate of 96.3%.
Its portfolio rental reversion also came in positive at 3.4% and would have been higher at 5.4% if China had been excluded.
The manager has also been active in acquisitions and capital recycling.
For 9M FY2025, three yield-accretive acquisitions were concluded in Malaysia and Vietnam.
A total of 13 properties were divested during this period because of older specifications and limited redevelopment potential.
AIMS APAC REIT (SGX: O5RU)
AIMS APAC REIT, or AAREIT, is an industrial REIT with a portfolio of 28 properties in Singapore (25) and Australia (3).
The total portfolio value as of 31 December 2024 stood at S$2.13 billion.
AAREIT reported a commendable set of earnings for 9M FY2025.
Gross revenue jumped 5.7% year on year to S$139.1 million while NPI inched up 1.9% year on year to S$99.6 million.
DPU improved by 1.1% year on year to S$0.0707.
The REIT’s trailing 12-month DPU stood at S$0.0944, giving its units a trailing 12-month distribution yield of 7.4% at a unit price of S$1.27.
Like MLT, AAREIT maintained a high portfolio occupancy of 94.5%.
Portfolio rental reversion stood high at 21.2% for 9M FY2025 and was close to the prior year’s 22.7%.
The tenant retention rate was also high at 76.3%.
AAREIT is carrying out two asset enhancement initiatives (AEIs) costing up to S$32 million to help rejuvenate its portfolio.
The first is at 7 Clementi Loop and is 50% completed while the other is at 15 Tai Seng Drive and is around 20% completed.
Both AEIs are targeted for completion in 1Q FY2026.
ESR REIT (SGX: J91U)
ESR REIT’s portfolio comprises 72 properties across Singapore (52), Australia (18), and Japan (2).
Its AUM stood at around S$6 billion as of 31 December 2024.
ESR REIT reported a weak result for 2024 with gross revenue declining by 4.1% year on year to S$370.5 million.
NPI dipped by 4.2% year on year to S$261.7 million and DPU slid 17.4% year on year to S$0.02119.
The weaker performance was because of the divestment of non-core assets and an enlarged unit base from an equity fundraising in the first half of 2023.
At a unit price of S$0.24, shares of the industrial REIT offer a trailing distribution yield of 8.8%.
2025 should see a full year of contribution from acquisitions conducted last year, along with a full year of contribution from completed AEIs.
Meanwhile, ESR REIT saw a 10.3% positive rental reversion for 2024 and expects this to continue for 2025, albeit at a slower pace.
CapitaLand Ascendas REIT (SGX: A17U)
CapitaLand Ascendas REIT, or CLAR, is Singapore’s oldest industrial REIT with a portfolio of 229 properties across Singapore, Australia, the US, the UK, and Europe.
CLAR’s AUM stood at S$16.8 billion as of 31 December 2024.
The REIT reported a respectable set of earnings for 2024 with gross revenue and NPI rising by 2.9% and 2.6% year on year, respectively, to S$1.5 billion and S$1 billion.
DPU crept up 0.3% year on year to S$0.15205, giving CLAR’s units a trailing distribution yield of 5.7% at a unit price of S$2.65.
Like MLT and AAREIT, CLAR’s portfolio occupancy rate also stood high at 92.8%.
The portfolio reported a positive rental reversion of 11.6% for 2024.
CLAR carried out two acquisitions last year, one of which is under development, for S$248.2 million.
Meanwhile, the industrial REIT has eight ongoing projects that are undergoing development, redevelopment, or refurbishment.
These projects are worth S$803.6 million in total and the manager is looking at these AEIs to help improve the portfolio’s returns.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
