REIT investors are looking for a healthy mix of stability and yield as they scour the landscape for dependable REITs.
With interest rates poised to decline, it is also harder for investors to earn a decent return by parking their money in bank accounts.
This is why REITs that deliver a sustainable and high yield are attractive and should form part of an income investor’s portfolio.
Here are five reliable REITs that continue to offer distribution yields of 5.1% or higher.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, is a commercial and industrial REIT with a portfolio of 112 properties worth around S$6.8 billion.
These properties are spread out across Singapore, the Netherlands, Australia, the UK, and Germany.
The REIT reported a resilient set of earnings for the first half of fiscal 2024 (1H FY2024) ending 31 March 2024.
Revenue edged up 3.9% year on year to S$216 million while net property income (NPI) inched up 1.8% year on year to S$158.7 million.
Distribution per unit (DPU) slipped by just 1.1% year on year to S$0.0348.
FLCT’s trailing 12-month DPU stood at S$0.07, giving its units a trailing distribution yield of 6.3%.
The REIT recently announced its third quarter of fiscal 2024 business update ending 30 June 2024.
Portfolio occupancy improved to 95% from 94.3% in the previous quarter and the REIT logged a positive rental reversion of 25.1%.
It had a healthy aggregate leverage ratio of 33.2% and a significant debt headroom of S$793 million to reach a 40% gearing level.
CapitaLand India Trust (SGX: CY6U)
CapitaLand India Trust, or CLINT, is an Indian business trust with total assets of around S$3.2 billion.
Its portfolio includes 10 IT business parks, a logistics park, three industrial facilities and four data centre developments.
CLINT announced a strong set of earnings for the first half of 2024 (1H 2024).
Property income climbed 23% year on year to S$136.1 million while NPI rose 21% year on year to S$103.5 million.
DPU improved by 8% year on year to S$0.0364.
CLINT’s trailing 12-month DPU stood at S$0.0673, giving its units a trailing distribution yield of 5.9%.
The Indian REIT enjoyed a committed occupancy of 96% as of 30 June 2024 and secured S$960 million in sustainability-linked financing.
CLINT also completed two acquisitions of properties back in March and July 2024 which have been leased to local and multinational companies.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of nine suburban malls and one office building.
Its assets under management (AUM) stood at S$7.1 billion as of 31 March 2024.
FCT reported a resilient performance for 1H FY2024 with gross revenue declining by 7.2% year on year to S$172.2 million.
NPI fell by 8.4% year on year to S$124.6 million because of lower contributions due to the divestment of Changi City Point in October 2023 and ongoing asset enhancement initiative (AEI) at Tampines 1 Mall.
1H FY2024’s DPU slipped by 1.8% year on year to S$0.06022.
FCT’s trailing 12-month DPU stood at S$0.12042, giving its units a trailing distribution yield of 5.1%.
The retail REIT’s recent 3Q FY2024 business update demonstrated its quality, with portfolio occupancy staying high at 99.7%.
Shopper traffic and tenant sales for the quarter also logged a 4.1% and 0.7% year-on-year increase, respectively.
The Tampines 1 AEI is on track for completion in September and the projected return on investment of more than 8% exceeds management’s target.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is a logistics REIT with a portfolio of 188 properties worth S$13.4 billion across eight countries.
For the first quarter of fiscal 2025 (1Q FY2025) ending 30 June 202, gross revenue dipped by 0.3% year on year to S$181.7 million.
NPI slid by 0.9% year on year to S$156.7 million as weaker exchange rates took a toll on the REIT’s top line and NPI.
DPU tumbled by 8.9% year on year to S$0.02068 because of higher finance costs.
MLT’s trailing 12-month DPU came in at S$0.088, giving its units a trailing 12-month distribution yield of 6.5%.
The logistics REIT’s portfolio occupancy stayed healthy at 95.7% and it also registered a positive rental reversion of 2.6% for the quarter.
MLT is working on two strategic AEIs in Singapore and Malaysia to increase the gross floor area of two properties so it can enjoy organic rental growth.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 83 properties in Singapore, 56 in the US, and one in Japan.
As of 30 June 2024, MIT’s assets under management stood at S$9 billion.
For 1Q FY2025, MIT saw gross revenue inch up 2.7% year on year to S$175.3 million.
NPI increased by 1.3% year on year to S$132.5 million with DPU rising 1.2% year on year to S$0.0343.
MIT’s trailing 12-month DPU came in at S$0.1347, giving the REIT a trailing 12-month distribution yield of 5.5%.
The REIT had just completed the phase three fit-out works for its new Japan data centre.
It also enjoyed a slight improvement in occupancy rate to 91.9%, up from 91.4% in the previous quarter.
The portfolio achieved a positive rental reversion of 9.2% for renewal leases, which attests to the strength of the demand for MIT’s properties.
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Disclosure: Royston Yang owns shares of Frasers Logistics & Commercial Trust and Mapletree Industrial Trust.
