The REIT sector took a tumble last year, declining by 12% year on year, due to a combination of high inflation and surging interest rates.
Luckily, it’s not all doom and gloom for the asset class.
REITs are mandated by law to pay out at least 90% of their earnings as distributions, thereby making them perfect for income-seeking investors.
What’s more, not all REITs are reacting the same way to the headwinds that are battering the sector.
Several REITs have continued to report higher distribution per unit (DPU) despite the challenges.
Here are four that recently raised their DPU.
AIMS APAC REIT (SGX: O5RU)
AIMS APAC REIT, or AAREIT, is an industrial REIT with a portfolio of 29 properties (26 in Singapore, and three in Australia).
The REIT recently released its fiscal 2023’s third quarter (3Q2023) earnings for the period ending 31 December 2022.
Gross revenue shot up 14.1% year on year to S$42 million, led by higher rental income from the properties in both countries along with contributions from the acquisition of Woolworths (ASX: WOW) Headquarters.
Net property income (NPI) rose 14% year on year to S$30.9 million while DPU increased by 10.2% year on year to S$0.0259.
For the first nine months of fiscal 2023 (9M2023), AAREIT’s DPU inched up 2.7% year on year to S$0.0729.
The industrial REIT’s trailing 12-month DPU came in at S$0.0965, giving its units a trailing distribution yield of 7%.
AAREIT enjoyed a high occupancy rate of 97.8% while recording a strong rental reversion of 21.2%.
The REIT’s aggregate leverage stood at 36.4% with an average blended funding cost of 3.2%.
Investors will be pleased to note that 88% of the REIT’s loans are on fixed rates, thereby mitigating a sharp increase in finance costs.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, owns a portfolio of 186 properties in eight countries with assets under management (AUM) of S$12.6 billion as of 31 December 2022.
MLT has also announced its 3Q2023 earnings, with gross revenue rising by 8% year on year to S$180.2 million for the quarter.
NPI improved by 7.3% year on year while DPU edged up 1.9% year on year to S$0.02227.
For 9M2023, the logistics REIT’s DPU inched up 3.4% year on year to S$0.06743.
MLT’s trailing 12-month DPU stood at S$0.09011, giving its units a trailing distribution yield of 5.2%.
The REIT has reported healthy operating metrics, with occupancy at 96.9% and a positive average rental reversion of 2.9% for the quarter.
Furthermore, MLT’s aggregate leverage came in at 37.4% with 83% of its borrowings on fixed rates.
As part of its capital recycling policy, the REIT announced the sale of three properties at a premium to valuation to unlock value for unitholders.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT, or PLife REIT, owns a portfolio of 61 properties comprising three Singapore hospitals, 57 Japanese nursing homes, and strata-titled units in a specialist clinic in Malaysia.
The REIT’s AUM came in at around S$2.2 billion as of 31 December 2022.
The healthcare REIT reported its fiscal 2022’s second half (2H2022) and full year (FY2022) earnings.
For 2H2022, gross revenue climbed 14.2% year on year to S$69.8 million, boosted by higher rents from properties acquired in both 2021 and 2022.
NPI increased by 18% year on year to S$65.8 million and DPU crept up 2.7% year on year to S$0.0732.
For FY2022, DPU continued its upward climb, rising 2.1% year on year to S$0.1438, continuing PLife REIT’s unbroken track record of consecutive core DPU increases since its IPO.
The healthcare REIT’s trailing distribution yield came in at 3.6%.
PLife REIT continues to enjoy a very low cost of debt of just 1.04% with 80% of its interest rate exposure hedged.
Starhill Global REIT (SGX: P40U)
Starhill Global REIT, or SGREIT, is a retail cum commercial REIT with 10 properties in Singapore, Australia, Malaysia, Japan, and China worth around S$2.9 billion.
SGREIT recently released its financial results for its fiscal 2023’s first half (1H2023) ending 31 December 2022.
Gross revenue inched up 4.1% year on year to S$94.7 million while NPI rose 6.7% year on year to S$74.3 million.
DPU crept up 2.2% year on year to S$0.0182.
SGREIT’s trailing 12-month DPU stood at S$0.0384, giving its units a trailing distribution yield of 6.5%.
The REIT enjoyed a high occupancy rate of 97.1% with a gearing of 36.3% as of 31 December 2022.
Moreover, 84% of SGREIT’s borrowings were hedged, limiting its exposure to future interest rate increases.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
