The REIT sector continues to be a great hunting ground for consistent dividends despite the twin challenges of high inflation and elevated interest rates.
Income investors can rely on REITs to supply them with a continuous stream of passive income.
Singapore’s core inflation rate stood at 3.1% over the past three months and looks poised to come in at 3.5% for 2024.
Here are five attractive Singapore REITs that sport distribution yields that can help you to easily beat inflation.
CapitaLand Ascendas REIT (SGX: A17U)
CapitaLand Ascendas REIT, or CLAR, is Singapore’s oldest industrial REIT with a portfolio of 229 properties across Singapore, the US, Australia, the UK, and Europe.
CLAR’s assets under management (AUM) stood at S$16.9 billion as of 30 June 2024.
The industrial REIT recently reported a mixed set of earnings for the first half of 2024 (1H 2024).
Gross revenue increased by 7.2% year on year to S$770.1 million while net property income (NPI) rose 3.9% year on year to S$528.4 million.
Distribution per unit (DPU), however, dipped by 2.5% year on year to S$0.07524 because of an increase in the number of units.
At a unit price of S$2.63, CLAR offers a forward annualised distribution yield of 5.7%.
The REIT has remained resilient despite the headwinds and reported a healthy portfolio occupancy of 93.1% as of 30 June 2024.
CLAR also saw a strong positive rental reversion of 13.4%.
The manager has undertaken two new asset enhancement initiatives (AEIs) at Aperia and One@Changi City in Singapore.
Together, these two AEIs are part of six ongoing projects worth S$572.8 million to help refurbish or redevelop the REIT’s Singapore properties.
Keppel REIT (SGX: K71U)
Keppel REIT is a commercial REIT with a portfolio value of over S$9 billion comprising properties in Singapore, Australia, South Korea, and Japan.
Like CLAR, Keppel REIT also announced a mixed set of earnings for 1H 2024.
Property income climbed 8.9% year on year to S$125.1 million, driven by higher occupancy at Ocean Financial Centre (Singapore) and KR Ginza II (Japan) along with contributions from acquisitions conducted in May this year.
NPI increased by 8% year on year to S$87.2 million.
However, DPU dipped slightly by 3.4% year on year to S$0.028 because of higher interest expenses.
Annualising Keppel REIT’s DPU gives us S$0.056, which means the office REIT’s units provide a forward distribution yield of 6.8%.
Keppel REIT boasts a high portfolio occupancy of 97% and saw a strong positive rental reversion of 9.3% for 1H 2024.
Although aggregate leverage stood at 41.3%, the REIT had 65% of its loans pegged to fixed rates.
OUE REIT (SGX: TS0U)
OUE REIT is a commercial and hospitality REIT with six assets in Singapore and one in Shanghai with the portfolio comprising 1,655 upscale hotel rooms and around 2.2 million square feet of prime office and retail space.
AUM stood at S$6.3 billion as of 31 December 2023.
OUE REIT also saw its DPU impacted by higher interest costs but both revenue and NPI rose 5.7% and 1.6% year on year, respectively, to S$146.7 million and S$117.1 million for 1H 2024.
Because of the 18.5% year-on-year jump in finance costs, DPU fell by 11.4% year on year to S$0.0093.
Annualising the DPU gives S$0.0186, which gives OUE REIT’s units a forward distribution yield of 6.8%.
The REIT’s aggregate leverage stood at 38.7% with a weighted average cost of debt of 4.7%.
The committed occupancy for its Singapore office properties stood high at 95.2% and this segment achieved a positive rental reversion of 11.7%.
For its hospitality division, revenue per available room (RevPAR) increased by 15.8% year on year to S$269 on the back of continued tourism recovery.
CDL Hospitality Trusts (SGX: J85)
CDL Hospitality Trusts, or CDLHT, is a hospitality trust with a portfolio of 20 properties consisting of 4,820 rooms, 352 build-to-rent apartment units, and a retail mall.
AUM stood at S$3.3 billion as of 30 June 2024.
1H 2024 saw the REIT’s revenue rise 6.8% year on year to S$127.3 million.
NPI improved by 5.9% year on year to S$66.5 million but distribution per stapled security (DPSS) stayed constant year on year at S$0.0251.
CDLHT’s units offer a prospective distribution yield of 5.6% based on the annualised DPSS of S$0.0502.
In 1H 2024, the hospitality trust’s RevPAR improved year on year for all its territories except New Zealand.
The REIT is conducting AEIs for Ibis Perth in Australia and Grand Millennium Auckland in New Zealand which should both be completed by the end of this year.
Starhill Global REIT (SGX: P40U)
Starhill Global REIT, or SGREIT, is a retail and office REIT with a portfolio of nine properties in Singapore, Malaysia, Australia, Japan, and China, valued at around S$2.8 billion.
The REIT recently released its fiscal 2024 (FY2024) earnings for the year ended 30 June 2024 which saw a mixed set of results.
Gross revenue inched up 1.1% year on year to S$189.8 million while NPI edged up 0.8% year on year to S$149 million.
DPU, however, slipped by 4.5% year on year to S$0.0363 because of weaker foreign currencies and higher finance costs.
The REIT’s units offer a trailing distribution yield of 7.6%.
Despite the dip, SGREIT boasts a high committed portfolio occupancy of 97.7%.
It also announced that AEI works were completed for Wisma Atria’s basement and the Myer Centre Adelaide’s façade in the second half of FY2024.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
