Singapore’s Central Provident Fund (CPF) scheme is an effective way to slowly grow your retirement funds.
However, the CPF Ordinary Account (OA), which can be used for share investments, real estate and education, enjoys an interest rate of just 2.5%.
Investors have the option to invest their OA monies to attain better returns than the current risk-free rate.
A good asset class for dividends is REITs, which are well-known for paying out a steady and dependable distribution.
Here are four Singapore REITs with distribution yields that exceed 2.5%.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties spread across eight countries.
Assets under management (AUM) stood at S$13.3 billion as of 31 December 2023.
For the first nine months of fiscal 2024 (9M FY2024) ending 31 December 2023, MLT reported a mixed financial performance.
Gross revenue inched 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, however, increased by 0.7% year on year to S$0.06792.
Based on the annualised DPU of S$0.09056, MLT’s units offer a prospective distribution yield of 6.2%.
The logistics REIT boasts a high portfolio occupancy rate of 95.9% as of the end of 2023.
Rental reversion also came in positive at 3.8% for the quarter.
MLT has announced a total of S$900 million of acquisitions year-to-date and is also working on an asset enhancement project at 51 Benoi Road in Singapore that is slated for completion in 1Q 2025.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with a portfolio of 21 properties in Singapore, two in Germany, and three in Australia.
The REIT’s total AUM stood at S$24.5 billion as of 31 December 2023.
2023 saw CICT deliver an admirable financial performance with both revenue and DPU heading higher.
Gross revenue rose 8.2% year on year to S$1.6 billion while NPI increased 7% year on year to S$1.1 billion.
DPU edged up 1.6% year on year to S$0.1075, giving CICT’s units a trailing distribution yield of 5.6%.
The retail and commercial REIT’s portfolio stood strong with a committed portfolio occupancy of 97.3%.
Both the retail and commercial components enjoyed positive rental reversion of 8.5% and 9%, respectively, for 2023.
CICT’s retail portfolio also saw tenant sales inch up 1.8% year on year and shopper traffic jump 8.6% year on year.
The portfolio’s valuation crept up 1.2% year on year, attesting to the strength of demand for CICT’s stable of properties.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT is a healthcare REIT with a portfolio of 63 properties.
These comprise three hospitals in Singapore, 59 nursing homes in Japan, and strata-titled lots/units in a specialist clinic in Malaysia.
All these assets have a combined value of around S$2.23 billion as of 31 December 2023.
2023 saw continued growth for Parkway Life REIT’s revenue and DPU.
Revenue rose 13.5% year on year to S$147.5 million while NPI increased by 14.1% year on year to S$139.1 million.
DPU improved by 2.7% year on year to S$0.1477, giving the healthcare REIT’s units a trailing distribution yield of 4.2%.
Parkway Life REIT has reported an unbroken track record of increasing core DPU since 2007.
The REIT intends to build a strategic long-term partnership with a local operator to identify assets for purchase.
It will also focus on rebalancing and optimising its portfolio.
With a gearing of 35.6% and a very low all-in cost of debt of just 1.27%, the healthcare REIT stands in good stead to carry out more yield-accretive acquisitions.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of 10 retail suburban malls and an office building.
Its portfolio is worth around S$6.9 billion as of 25 October 2023.
FCT’s gross revenue rose 3.6% year on year to S$369.7 million for the fiscal year ending 30 September 2023.
NPI increased by 2.7% year on year to S$265.6 million.
DPU, however, slipped slightly by 0.6% year on year to S$0.1215.
Based on the unit price of S$2.18, FCT’s units offer a trailing distribution yield of 5.6%.
The REIT recently released its first quarter fiscal 2024 (1Q FY2024) business update featuring strong operating metrics.
Retail committed portfolio occupancy came in at 99.9% as of 31 December 2023.
Tenant sales for 1Q FY2024 increased by 3.1% year on year while tenant sales would have improved by 1.1% year on year when adjusted for tenants under renovation.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
