REITs are well-known for paying out steady, consistent dividends.
With Singapore being known as a REITs hub, investors are fortunate to be able to choose from a delectable “buffet” of REITs that cover a wide variety of countries and sectors.
Income-seeking investors relish the thought of seeing their bank account balances head steadily up as they receive this flow of passive income.
While higher dividend yields are always welcome, investors need to find that sweet spot where yields are neither too high nor too low.
If dividend yields are too high and run into double-digits, this may imply weakness in the REIT and signals an impending fall in the distribution per unit (DPU).
But if yields are too low, they may not be enticing enough for investors as inflation rate averages around 2% to 3% per year over the long-term.
Hence, we believe that a dividend yield of around 4% to 6% represents a comfortable range for investors to aim for.
Here are five REITs with dividend yields higher than 4% that you may wish to include in your watchlist.
Keppel Pacific Oak US REIT (SGX: CMOU)
Keppel Pacific Oak US REIT, or KORE, is an office REIT that invests in commercial properties in key growth markets in the US.
KORE’s portfolio consists of 13 freehold office buildings located in eight cities in the US, with over 50% of the portfolio located in technology hubs.
For its fiscal year 2020 earnings, the REIT reported a 13.6% increase in gross revenue to US$139.6 million.
Net property income (NPI) rose 11% year on year to US$83 million, buoyed by contributions from an acquisition, built-in rental escalations and positive rental reversion.
DPU inched up 3.7% year on year to US$0.0623.
Trailing 12-month dividend yield stands at 8.4% at a share price of US$0.74.
Starhill Global REIT (SGX: P40U)
Starhill Global REIT, or SGR, invests in a portfolio of retail and office properties.
The REIT’s portfolio consists of 10 properties in Singapore, Australia, Malaysia, China and Japan valued at around S$2.9 billion as of 31 December 2020.
For its fiscal 2021 first-half earnings, SGR reported an 8.6% year on year decline in gross revenue.
NPI fell by 12.3% year on year to S$65 million.
The decline was attributed to rental assistance for eligible tenants impacted by the COVID-19 pandemic.
DPU for the first half came up to S$0.0188, a decline of around 17% year on year.
At an annualised DPU of S$0.0374 and the last traded price of S$0.54, SGR’s dividend yield was 6.9%.
Suntec REIT (SGX: T82U)
Suntec REIT is one of Singapore’s oldest REITs and holds a portfolio of retail and commercial properties in Singapore, Australia and the UK.
For its full fiscal year 2020, the REIT reported a 14% year on year fall in gross revenue to S$315.4 million.
This was mainly due to rent assistance doled out to tenants of Suntec City Mall, along with a reduction in revenue from the convention centre due to the pandemic.
The fall was partially offset by contributions from new acquisitions in Australia over the past year.
NPI fell 15.4% year on year to S$200 million, while DPU dropped by 22.1% year on year to S$0.07402.
At Suntec’s last traded price of S$1.54, the DPU represents a trailing dividend yield of 4.8%.
ARA Logos Logistics Trust (SGX: K2LU)
ARA Logos Logistics Trust invests in industrial real estate used for logistics purposes.
Its portfolio comprises 27 high-quality logistics warehouses located in logistics clusters in Singapore and Australia.
For its full fiscal year 2020, the REIT reported a 3.4% year on year improvement in gross revenue.
NPI inched up 4.8% year on year to S$90 million.
DPU declined by 4.9% year on year to S$0.0525. However, if capital and one-off distributions were removed, DPU would have increased by 8.8% year on year.
The trailing dividend yield for the REIT stands at 7.6% at a share price of S$0.69.
Keppel REIT (SGX: K71U)
Keppel REIT holds a portfolio of Grade A commercial assets in key business districts within Asia.
The REIT has assets under management of over S$8 billion in Singapore, Australia and South Korea.
Keppel REIT reported a resilient set of numbers for its full fiscal year 2020.
Property income inched up 3.8% year on year to S$170.2 million, while NPI attributable to shareholders was up 5.8% year on year.
DPU rose slightly by 2.7% year on year to S$0.0573.
At the REIT’s last traded price of S$1.18, its trailing dividend yield stands at 4.9%.
Start the year off right, and make 2021 a more profitable year for your investments. Download your FREE report: 3 Stocks I will buy in 2021! It comes with a bonus 3 trends for 2021, so you will be well equipped to ride the stock market recovery in 2021. Click HERE to download now!
Disclaimer: Royston Yang owns shares in Suntec REIT.