The REIT sector has been in the doldrums these past several years because of a combination of high interest rates and surging inflation.
However, things may be looking up.
Inflation has eased significantly from its highs while interest rates are stabilising.
Income-seeking investors can turn to retail REITs as this REIT sub-segment offers attractive yields.
Here are four Singapore REITs with distribution yields of 5.7% or more.
Lendlease Global Commercial REIT (SGX: JYEU)
Lendlease Global Commercial REIT, or LREIT, owns a portfolio of five properties with two in Singapore (Jem and 313 Somerset), and three in Milan (Sky Complex).
These properties have a total value of S$3.68 billion as of 30 June 2024.
LREIT reported a downbeat set of earnings for the first half of fiscal 2025 (1H FY2025) ending 31 December 2024.
Gross revenue fell by 13.6% year on year to S$103.6 million because 1H FY2024 included the supplementary rent received from Sky Complex’s lease restructuring.
After adjusting for this item, 1H FY2025 gross revenue would have been 0.4% higher year on year, while net property income (NPI) would have been 2.2% lower year on year.
For 1H FY2025, distribution per unit fell by 14.3% year on year to S$0.018.
LREIT’s trailing 12-month DPU stood at S$0.0357, giving its units a trailing 12-month distribution yield of 7.1%.
The REIT’s portfolio committed occupancy stood at 92.3%, with retail occupancy almost achieving 100%.
LREIT posted a positive rental reversion of 10.7% for 1H FY2025 but saw tenant sales decline by 5.2% year on year.
Still, the retail and commercial REIT reported a high tenant retention of 86.1% by net lettable area.
Construction of a new multi-functional space adjacent to 313 Somerset has commenced and should be completed by the second half of 2026.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of nine suburban retail malls and an office building.
The REIT has assets under management (AUM) of around S$7.1 billion as of 30 September 2024.
For its fiscal 2024 (FY2024) ending 30 September 2024, FCT reported a 4.9% year-on-year decline in gross revenue while its NPI fell by 4.6% year on year to S$253.4 million.
The dip was because of the absence of contributions from Changi City Point which was divested in October 2023 along with lower contribution from Tampines 1 during its refurbishment.
On a like-for-like basis, FCT would have reported a 3.5% and 3.4% year-on-year increase in gross revenue and NPI, respectively.
DPU for FY2024 stood at S$0.12042, giving the retail REIT’s units a trailing distribution yield of 5.7%.
FCT continued to report strong operating metrics for the first quarter of fiscal 2025 (1Q FY2025) ending 31 December 2024.
The retail portfolio committed occupancy stood at 99.5% while shopper traffic and tenant sales posted year-on-year increases of 2.7% and 2.5%, respectively.
For the REIT’s Hougang Mall asset enhancement initiative (AEI), the manager is targeting around 7% return on investment (ROI) on capital expenditure of S$51 million.
Sasseur REIT (SGX: CRPU)
Sasseur REIT is a China retail outlet mall REIT with a portfolio of four retail outlet mall assets located in Chongqing, Kunming, and Hefei.
The REIT reported a mixed performance for the first half of 2024 (1H 2024).
Total rental income (fixed + variable) increased marginally by 0.9% year on year to S$329 million.
Distributable income, however, fell by 2.9% year on year to S$42.7 million and DPU declined by 5.1% year on year to S$0.03153.
Sasseur REIT’s trailing 12-month DPU stood at S$0.0608, giving its units a trailing 12-month distribution yield of 8.9%.
For the first nine months of 2024 (9M 2024), outlet sales at the four malls fell by 7.2% year on year to RMB 3.1 billion because of weak consumer sentiment.
However, total rental income fell by just 0.1% year on year to RMB 487.6 million.
Because of the weakening of the RMB against the Singapore Dollar, there was a 1.5% year-on-year dip in rental income to S$91.5 million.
However, portfolio occupancy hit a new high of 98% and Sasseur REIT has one of the lowest gearing levels among S-REITs at just 25.5%.
The manager is confident of the REIT’s outlook with China’s jumbo stimulus measures aiming to recharge the economy and fuel consumer spending.
Starhill Global REIT (SGX: P40U)
Starhill Global REIT, or SGREIT, owns a portfolio of nine properties across Singapore, Malaysia, Australia, China, and Japan.
These properties are valued at around S$2.8 billion.
The retail REIT reported a respectable set of earnings for 1H FY2025.
Gross revenue inched up 1.7% year on year to S$96.3 million while NPI edged up 1.6% year on year to S$75.6 million.
DPU improved by 1.1% year on year to S$0.018, giving SGREIT a trailing 12-month DPU of S$0.0365.
The retail REIT’s units offer a trailing 12-month distribution yield of 7.6%.
SGREIT enjoyed a high committed portfolio occupancy of 97.7% as of 31 December 2024.
It also had a moderate gearing level of 36.2% with 83% of its loans hedged to fixed rates.
The manager is carrying out an AEI for Wisma Atria’s taxi stand and level seven car park.
These two projects should cost around S$4.8 million and will help to modernise the design (of the taxi stand) and free up 3,250 square feet of office space in Ngee Ann City for lease.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
