Although the REIT sector was battered by headwinds this year, REITs continue to act as a reliable source of dividends.
This is because REITs are mandated to pay out at least 90% of their earnings as distributions to enjoy tax benefits.
Investors may be worried about whether REITs can cope with the combination of high inflation and surging interest rates.
During challenging times, it is recommended that you stick with REITs that have strong sponsors, quality assets, and long track records.
Here are five dependable Singapore REITs with distribution yields of 5.5% or higher.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 56 properties in the US, 85 properties in Singapore, and one property in Japan.
Its assets under management (AUM) stood at S$9.2 billion as of 30 September 2023.
MIT reported a mixed set of earnings for the first half of fiscal 2024 (1H FY2024) ending 30 September 2023.
Gross revenue inched up 0.4% year on year to S$344.7 million, partly due to the higher distribution declared by a joint venture and divestment gain from 65 Tech Park Crescent on the finalisation of tax treatment.
Net property income (NPI), however, slipped 0.3% year on year to S$259.4 million on higher operating expenses.
Distribution per unit (DPU) fell by 2% year on year to S$0.0671 on an enlarged unit base.
MIT’s trailing 12-month DPU stood at S$0.1343, giving its units a trailing distribution yield of 5.4%.
The REIT manager had just concluded the acquisition of an Osaka data centre which will see a full quarter of rental income accruing to the REIT in 3Q FY2024.
MIT’s occupancy level remained decent at 93.2% with a positive portfolio weighted average rental reversion of 8.8% for renewal leases.
Gearing remained fair at 37.9%, allowing more debt headroom for yield-accretive acquisitions.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, is an industrial and commercial REIT with a portfolio of 107 properties in five countries – Singapore, the UK, Australia, the Netherlands, and Germany.
Its AUM stood at around S$6.4 billion as of 30 September 2023.
FLCT’s fiscal 2023 (FY2023) ending 30 September 2023 saw a downbeat performance.
Revenue fell by 6.5% year on year to S$420.8 million while NPI slid 9% year on year to S$311.4 million.
DPU declined by 7.6% year on year to S$0.0704, giving the REIT’s units a trailing distribution yield of 6.2%.
On a positive note, FLCT reported a strong 18.9% positive rental reversion across its portfolio for FY2023.
Aggregate leverage also remained low at 30.2% with the cost of borrowings at 2.2%.
The REIT has no major refinancing for 1H FY2024 with facilities in place to refinance all the loans in FY2024.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with 21 properties in Singapore, two in Frankfurt, and three in Sydney.
Total AUM stood at S$24.2 billion as of 31 December 2022.
CICT saw its DPU rise from S$0.0522 to S$0.053 for 1H 2023, and its trailing 12-month DPU stood at S$0.1066.
Units of the REIT provide investors with a 5.2% trailing distribution yield.
For the first nine months of 2023 (9M 2023), CICT pulled off a respectable performance.
Gross revenue rose 9.8% year on year to S$1.2 billion while NPI rose 6.8% year on year to S$827.3 million.
Both its retail and office segments also enjoyed a positive rental reversion of 7.8% and 8.8%, respectively.
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 property in Singapore.
Its AUM was S$6.5 billion as of 31 October 2022.
FY2023 saw FCT’s gross revenue edge up 3.6% year on year to S$369.7 million with NPI rising 2.7% year on year to S$265.6 million.
DPU came in at S$0.1215, giving units of the retail REIT a historical distribution yield of 5.4%.
FCT saw committed occupancy hit 99.7% while the committed reversion rate came in at a positive 4.7%, demonstrating the REIT’s resilience.
Shopper traffic for FY2023 also rose 24.7% year on year with tenant sales improving by 7.3% year on year.
Aggregate leverage will reduce to 36.1% after the completion of the divestment of Changi City Point and units of Hektar REIT (KLSE: 5121).
CapitaLand Ascendas REIT (SGX: A17U)
CapitaLand Ascendas REIT, or CLAR, is Singapore’s oldest industrial REIT.
The REIT owns a portfolio of 230 properties in Singapore, Australia, the US, the UK, and Europe worth S$17.2 billion as of 30 September 2023.
CLAR’s trailing 12-month DPU stood at S$0.15644, giving its units a trailing distribution yield of 5.2%.
The industrial REIT’s 3Q 2023 business update saw portfolio occupancy stay high at 94.5% while the portfolio enjoyed a positive rental reversion of 10.2% for the quarter.
CLAR has ongoing projects to improve the quality of its portfolio worth S$600 million including three redevelopments in Singapore and a convert-to-suit property in the US.
Gearing stood at 37.2% as of 30 September 2023 with an all-in average cost of debt of 3.3%, allowing the REIT to utilise debt to fund further acquisitions and redevelopments.
In our latest report, we dive into five standout Singapore REITs offering distribution yields exceeding 5.5%. Why settle for less? Get more dividends hitting your bank account with our REITs guide. Click here to download for free now.
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Disclosure: Royston Yang owns shares of Frasers Logistics & Commercial Trust and Mapletree Industrial Trust.
