Singapore’s Central Provident Fund (CPF) scheme helps you to save diligently for retirement.
While the CPF scheme offers a near-guaranteed interest rate of 2.5% on your Ordinary Account (OA), it may not be sufficient to beat inflation.
Singapore’s core inflation is running at 3.2% for November 2023 and the government expects the inflation rate to hover between 2.5% to 3.5% for this year.
Investing is one method you can tap on to earn a yield superior to that offered by the CPF OA.
The REIT sector offers steady and dependable distributions that act as a useful source of passive income.
Here are five REITs that yield more than what your CPF OA offers.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 142 properties across six property segments.
Data centres make up 56% of its total assets under management (AUM) of S$9.2 billion as of 30 September 2023.
The industrial REIT reported a mixed performance for the first half of fiscal 2024 (1H FY2024).
Gross revenue edged up 0.4% year on year to S$344.7 million but distribution per unit (DPU) dipped by 2% year on year to S$0.0671.
The REIT’s trailing 12-month (TTM) DPU stood at S$0.1343, giving its units a trailing distribution yield of 5.4%.
There could be better days ahead for MIT as it just completed the acquisition of a data centre in Osaka, Japan, for around S$507.9 million.
The portfolio also reported a positive rental reversion of 8.8% for renewal leases.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of nine suburban retail malls and one office building.
The REIT’s AUM stood at S$6.9 billion as of 30 September 2023.
The retail REIT reported a resilient set of earnings for its fiscal 2023 (FY2023) ending 30 September.
Gross revenue rose 3.6% year on year to S$369.7 million with net property income (NPI) edging up 2.7% year on year to S$265.6 million.
DPU, however, slipped by 0.6% year on year to S$0.1215 due to higher utilities and staff costs.
Units of FCT provide a trailing distribution yield of 5.4%.
FCT maintained a high committed occupancy of 99.7% with a committed positive rental reversion rate of 4.7%, demonstrating the strong leasing demand for its properties.
For FY2023, shopper traffic also climbed 24.7% year on year while tenant sales improved by 7.3% year on year.
The REIT manager kept busy in FY2023 with two acquisitions – that of a 25.5% stake in NEX Mall and an additional 10% stake in Waterway Point.
These two transactions will help to boost the REIT’s DPU in the future.
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, three in Australia, and two in Germany.
The REIT’s portfolio was valued at S$24.2 billion as of 31 December 2022.
CICT’s TTM DPU came in at S$0.1066, giving the REIT a trailing distribution yield of 5.3%.
For the first nine months of 2023 (9M 2023), CICT saw gross revenue rise 9.8% year on year to S$1.2 billion while NPI improved by 6.8% year on year to S$827.3 million.
Committed occupancy stood high at 97.3% for the portfolio and the REIT reported positive rental reversions of 7.8% and 8.8% for its retail and office divisions, respectively.
CICT’s asset enhancement initiative (AEI) at CQ @ Clarke Quay is also due for completion at the end of 2023 and the property achieved a committed occupancy of 85%.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data centre REIT with a portfolio of 23 data centres across nine countries.
Its AUM stood at S$3.7 billion as of 30 September 2023.
For 9M 2023, Keppel DC REIT reported a mixed set of results.
Gross revenue rose 2.6% year on year to S$211.1 million as acquisitions and positive rental reversions boosted the REIT’s top line.
However, DPU slid 1.2% year on year to S$0.07543 because of higher finance costs and lower contributions from Singapore’s colocation assets.
The data centre REIT’s TTM DPU stood at S$0.10123, giving its units a trailing distribution yield of 5.5%.
Keppel DC REIT had an aggregate leverage of 37.2% with the bulk of its debt expiring in 2026 and beyond, helping the REIT to mitigate higher finance costs moving ahead.
Sector-wise, the data centre market should see strong demand growth as cloud service providers opt for a colocation strategy to complement their self-build strategy.
The rise in artificial intelligence (AI) demand will also require more data centres to be built and utilised over the next medium term.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT, or PLife REIT, is a healthcare REIT with a portfolio of 61 properties with an AUM of around S$2.2 billion.
Around 63% of its gross revenue is derived from Singapore with the remainder coming from Japan.
PLife REIT announced a sparkling set of earnings for 9M 2023.
Gross revenue jumped 24.6% year on year to S$110.9 million with NPI rising 26.2% year on year to S$104.5 million.
DPU inched up 2.8% year on year to S$0.1099, giving the REIT a TTM DPU of S$0.1467.
Parkway Life REIT’s units deliver a TTM distribution yield of 4%.
The REIT continues to have a right-of-first-refusal over a Singapore hospital, Mount Elizabeth Novena, for 10 years.
It recently completed the acquisition of two Japanese nursing homes in October last year and is looking at developing a third key market for growth in the mid to long term.
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Disclosure: Royston Yang owns shares of Keppel DC REIT and Mapletree Industrial Trust.
