Things are looking up for the REIT sector.
The past two years have seen REITs’ distributable income take a hit from both surging inflation and higher interest rates.
With the US Federal Reserve slashing interest rates by a full percentage point last year, REIT investors must be breathing a sigh of relief.
In particular, the industrial REIT sub-sector has held up well as demand for industrial and logistics space continued to be strong post-pandemic.
Here are five attractive Singapore industrial REITs that sport distribution yields of 6.1% and above.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 56 properties in the US, 83 in Singapore, and two in Japan.
As of 31 December 2024, MIT’s total assets under management (AUM) stood at S$9.2 billion.
The industrial REIT reported a resilient set of earnings for the third quarter of fiscal 2025 (3Q FY2025) ending 31 December 2024.
Gross revenue increased 2% year on year to S$177.3 million while net property income (NPI) rose 2.6% year on year to S$133.2 million.
Distribution per unit (DPU) inched up 1.5% year on year to S$0.0341.
MIT’s trailing 12-month DPU stood at S$0.1357, giving its units a trailing distribution yield of 6.1%.
The industrial REIT maintained a robust portfolio occupancy rate of 92.1% and also recorded a positive rental reversion of 9.8% for renewal leases across all property segments in Singapore.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, owns a portfolio of 183 properties across eight countries with total AUM of S$13.4 billion as of 31 December 2024.
MLT reported a downbeat set of earnings for the first nine months of fiscal 2025 (9M FY2025) ending 31 December 2024.
Gross revenue dipped by 1% year on year to S$547.4 million due to weaker regional currencies and weakness in China.
NPI slipped by 1.5% year on year to S$472.5 million while DPU fell by 10.2% year on year to S$0.06098 because of higher finance costs.
MLT’s trailing 12-month DPU came in at S$0.08309, giving its units a trailing distribution yield of 6.5%.
Despite the weaker results, investors should note that borrowing costs are easing as these only rose 0.3% quarter-on-quarter.
The REIT also saw portfolio occupancy at 96.3% while portfolio rental reversion came in positive at 3.4%, reversing the previous quarter’s decline of 0.6%.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, is a logistics and commercial REIT with a portfolio of 112 properties across five countries.
FLCT’s AUM stood at around S$6.8 billion as of 30 September 2024.
The REIT reported a mixed set of results for its fiscal 2024 (FY2024) ending 30 September 2024.
Both revenue and NPI improved by 6.2% and 2.7%, respectively, to S$446.7 million and S$320 million.
DPU, however, tumbled 3.4% year on year to S$0.068 because of higher interest costs.
At a unit price of S$0.885, FLCT’s units offer a trailing distribution yield of 7.7%.
Despite the lower DPU, there were several positive signs that investors should note.
The REIT continued to maintain a high portfolio occupancy of 94.5%.
Also, FY2024 rental reversion came in strong at positive 38.8%.
Aggregate leverage also stood at just 33%, giving the REIT a debt headroom of S$801 million before it hits the 40% level.
AIMS APAC REIT (SGX: O5RU)
AIMS APAC REIT, or AAREIT, owns a portfolio of 28 industrial properties in Singapore (25) and Australia (3).
The portfolio’s AUM stood at S$2.2 billion as of 30 September 2024.
AAREIT reported a respectable set of earnings for the 1H FY2025 with gross revenue jumping 7.7% year on year to S$93.5 million.
NPI increased by 5.1% year on year to S$67.6 million while DPU edged up 0.4% year on year to S$0.0467.
AAREIT’s trailing 12-month DPU stood at S$0.0938, giving its units a trailing distribution yield of 7.4%.
The REIT maintained a high portfolio occupancy of 95% with a total of 194 tenants within its portfolio.
Rental reversion came in strong at positive 16.9% for 1H FY2025 and tenant retention rate was also high at 78.6%.
ESR REIT (SGX: J91U)
ESR REIT (formerly ESR-Logos REIT) owns a portfolio of 71 properties in Singapore (52), Australia (18) and Japan (1).
The total AUM stood at S$5 billion as of 30 June 2024.
ESR REIT reported a downbeat set of earnings for 1H 2024, with gross revenue and NPI tumbling 8.1% and 9.2% year on year, respectively, to S$180.9 million and S$127.8 million.
DPU tumbled 18.6% year on year to S$0.0122.
The REIT’s trailing 12-month DPU stood at S$0.02308, giving its units a trailing distribution yield of 8.9%.
ESR REIT released its 9M 2024 business update recently.
Gross revenue and NPI continued its downward trend, declining by 6.3% and 6.5%, respectively, to S$272.5 million and S$192.7 million.
However, this was offset by a high portfolio occupancy rate of 91.3% along with a positive rental reversion of 11% for 9M 2024.
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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust and Frasers Logistics & Commercial Trust.
