Singapore’s REIT sector has taken a hit amid high interest rates and soaring inflation.
The good news is that these headwinds may soon abate.
Income investors can look to diversified REITs to help to cushion the impact of these challenges.
In particular, retail and commercial REITs are a great option for investors to diversify their portfolios and keep the dividends flowing.
Here are four such REITs that sport distribution yields of 5.3% or higher.
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 blue-chip REIT’s assets under management (AUM) stood at S$26 billion as of 31 December 2024.
CICT reported a commendable set of earnings for 2024 with gross revenue rising 1.7% year on year to S$1.59 billion.
Net property income (NPI) climbed 3.4% year on year to S$1.15 billion while distribution per unit (DPU) inched up 1.2% year on year to S$0.1088.
At a unit price of S$2.07, shares of CICT offer a trailing distribution yield of 5.3%.
The REIT enjoyed a high portfolio occupancy of 96.7%.
The portfolio also saw a positive rental reversion of 8.8% for its retail segment and 11.1% for the office segment.
In addition, CICT also saw increased footfall in 2024, with shopper traffic rising 8.7% year on year.
Tenant sales improved by 3.4% year on year in the same period.
CICT is making good progress on its two asset enhancement initiatives (AEIs).
For the IMM Building, Phase III will commence soon and be completed by the third quarter of 2025 (3Q 2025) while for Gallileo in Germany, there is a target phased handover to the key tenant from the second half of this year.
Mapletree Pan Asia Commercial Trust (SGX: N2IU)
Mapletree Pan Asia Commercial Trust, or MPACT, owns a portfolio of 17 commercial and retail properties in Singapore (4), Hong Kong (1), China (2), Japan (9), and South Korea (1).
These properties are valued at around S$15.7 billion.
MPACT reported a downbeat set of earnings for the first nine months of fiscal 2025 (9M FY2025) ending 31 December 2024.
Gross revenue dipped 4.6% year on year to S$686 million, mainly due to reduced contribution following the divestment of Mapletree Anson and adverse foreign exchange effects.
NPI fell by 5.7% year on year to S$514 million.
DPU tumbled 8.3% year on year to S$0.0607.
MPACT’s trailing 12-month DPU amounted to S$0.0836, giving its units a trailing 12-month distribution yield of 7.1%.
The retail and commercial REIT reported a committed occupancy of 90%.
The portfolio also enjoyed a positive rental reversion of 4.6%.
However, both VivoCity and Festival Walk saw year-on-year declines in tenant sales because of outbound travel.
VivoCity is undergoing a phased AEI for its Basement 2 which should increase retail lettable area by 14,000 square feet.
This AEI should be completed by end-2025 and is projected to generate a return on investment of over 10%.
Starhill Global REIT (SGX: P40U)
Starhill Global REIT, or SGREIT, owns a portfolio of nine properties in Singapore, Australia, Malaysia, Japan, and China.
Its total AUM stood at around S$2.8 billion as of 31 December 2024.
For the first half of fiscal 2025 (1H FY2025) ending 31 December 2024, gross revenue improved by 1.7% year on year to S$96.3 million.
NPI increased by 1.6% year on year to S$75.6 million.
DPU crept up 1.1% year on year to S$0.018.
SGREIT’s trailing 12-month DPU came in at S$0.0365, giving its units a trailing 12-month distribution yield of 7.6% at a unit price of S$0.48.
The REIT enjoyed a high committed portfolio of 97.7%.
The portfolio also had a long weighted average lease expiry of 7.4 years based on committed leases.
SGREIT has a low gearing of 36.2% with 83% of its loans hedged to fixed rates.
The REIT has an ongoing AEI for Wisma Atria to renovate its taxi stand to feature a modern design that aligns with the completed interior upgrading works.
The Level 7 car park will also be repurposed for office use.
Lendlease Global Commercial REIT (SGX: JYEU)
Lendlease Global Commercial REIT, or LREIT, is a retail and commercial REIT with a portfolio comprising Jem and 313 @ Somerset in Singapore and Sky Complex (comprising three office buildings) in Milan, Italy.
These five properties are valued at S$3.68 billion as of 30 June 2024.
For 1H FY2025, LREIT saw gross revenue fall 13.6% year on year to S$103.6 million.
This decline was because of the upfront recognition of supplementary rent received after Sky Complex’s lease restructuring.
After adjusting for this, gross revenue would have been 0.4% higher year on year.
NPI for the period plunged 19.8% year on year to S$74.9 million but would have dipped just 2.2% year on year if the supplementary rent was accounted for.
DPU declined 14.3% year on year to S$0.018. LREIT’s trailing 12-month DPU stood at S$0.0357.
As a unit price of S$0.51, the retail and commercial REIT’s trailing 12-month distribution yield stood at 7%.
LREIT’s portfolio committed occupancy stood at 92.3% and the retail segment enjoyed a positive rental reversion of 10.7%.
Tenant retention (by net lettable area) was also healthy at 86.1% but tenant sales saw a 5.2% year-on-year decline for 1H FY2025.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
Note: Share prices as of 15 April 2025.
