It’s a great feeling when you receive a dividend that fattens your bank account.
But the occasion becomes even more joyous when that dividend is growing.
REITs are well-known for being reliable, dividend-paying investments that churn out a steady flow of passive income.
Income-driven investors are drawn towards REITs as a way to grow their dividend stream to better prepare themselves for retirement.
But not all REITs rank the same.
It’s important to select those with a strong track record of increasing their distribution per unit (DPU) so that your portfolio can tide over tough economic times.
Here are four Singapore REITs that upped their DPU this month.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is a logistics-focused REIT that owns a portfolio of 185 properties worth S$13 billion as of 30 June 2022.
These properties are spread out across Singapore, Australia, China, Hong Kong SAR, Japan, India, Malaysia, South Korea, and Vietnam.
For its fiscal 2023’s first quarter (1Q2023) ended 30 June 2022, gross revenue rose 14.6% year on year to S$187.7 million while net property income increased by 13.2% year on year to S$163.2 million.
DPU inched up 5% year on year to S$0.02268, bringing annualised DPU for MLT to S$0.09072.
At a unit price of S$1.76, the REIT sported a forward distribution yield of 5.2%.
MLT also reported healthy operating and debt metrics.
Portfolio occupancy stood at a healthy 96.8% with a positive average rental reversion of 3.4% for the quarter.
Aggregate leverage for the REIT stood at 37.2% with a low cost of debt of 2.3%.
80% of MLT’s debt is hedged or has fixed rates locked in, and a 0.25 per cent increase in interest rates will only cause DPU to decline by S$0.0001 per quarter.
Sabana Industrial REIT (SGX: M1GU)
Sabana Industrial REIT owns a diversified portfolio of 18 industrial properties in Singapore worth more than S$900 million as of 31 December 2021.
For its fiscal 2022’s first half (1H2022) ended 30 June 2022, gross revenue jumped by 14.7% year on year to S$44.9 million, aided by higher portfolio occupancy and the securing of a new 10-year master lease for one of its properties.
NPI edged up 5.2% year on year to S$27 million while DPU improved by 7.4% year on year to S$0.0159.
Sabana’s annualised DPU stands at S$0.0318 and its units provide a forward distribution yield of 7.1%.
The portfolio’s occupancy stood high at 88.2% and the REIT reported a positive rental reversion of 17.4% for the second quarter of 2022, chalking up nine quarters of positive reversion in the last 10 quarters.
Aggregate leverage was at 33.4% with an all-in financing cost of 3.35%.
Around three-quarters of Sabana’s debt is on fixed rates, thus providing a buffer against rising finance costs.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data centre REIT that owns a portfolio of 21 data centres across nine countries valued at S$3.5 billion as of 30 June 2022.
For 1H2022, gross revenue inched up 0.3% year on year to S$135.5 million.
NPI dipped by 0.5% year on year to S$123.2 million but DPU edged up 2.5% year on year to S$0.05049.
With an annualised DPU of S$0.10098, Keppel DC REIT’s units provide a prospective distribution yield of 5%.
The REIT had just announced the purchase of two data centres in Guangdong, China that will boost DPU by 2.7%.
Portfolio occupancy remained high at 98.2% and the REIT’s gearing stood at 35.3%, a level that allows the REIT to tap on more debt for acquisitions.
The average cost of debt remained low at 1.9% while the interest cover ratio stood healthy at 9.2 times.
AIMS APAC REIT (SGX: O5RU)
AIMS APAC REIT, or AAREIT, is an industrial REIT that owns 29 properties, of which 26 are in Singapore and three in Australia.
The properties comprise a mix of light industrial buildings, Hi-Tech buildings, and logistics warehouses.
For 1Q2023, AAREIT saw gross revenue surge 29.8% year on year to S$41.3 million, lifted by higher rental income from existing properties and the completion of an Australian development (Woolworths Headquarters).
NPI climbed 34.3% year on year to S$31 million and DPU inched up 1.3% year on year to S$0.0228.
AAREIT’s units offer a prospective distribution yield of 6.6% based on the annualised DPU of S$0.0912.
The portfolio enjoyed high occupancy of 97.9% with a strong rental reversion of 9.5% for the quarter.
Aggregate leverage stood at 37% with 65% of borrowings on fixed rates.
The cost of debt was also low at 2.7%.
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Disclaimer: Royston Yang owns shares of Keppel DC REIT.