The REIT sector continues to be a great source of dividends for income-driven investors.
Despite the spectre of surging inflation and higher interest rates, well-managed REITs have held their own and posted healthy growth in distributions.
The requirement to pay out at least 90% of their net profit makes REITs a dependable passive income generator.
With Singapore’s 2022 core inflation running at 4.1%, it’s important to find REITs that sport attractive distribution yields.
Core inflation also looks set to remain high for this year, hovering between 3.5% to 4.5%.
Here is a list of five Singapore REITs that sport distribution yields of 5.3% or more.
Keppel REIT (SGX: K71U)
Keppel REIT is a commercial REIT that owns a portfolio of 12 properties across Singapore, Australia, Japan, and South Korea.
Its assets under management (AUM) stood at S$9.2 billion as of 31 December 2022.
For 2022, Keppel REIT saw its property income inch up 1.2% year on year to S$219.3 million.
Net property income (NPI) edged up 2% year on year to S$158.9 million while distribution per unit (DPU) improved by 1.7% year on year to S$0.0592.
Investors should note that the DPU includes S$10 million of distributable income as part of the first tranche of the REIT’s Anniversary Distribution.
The Anniversary Distribution comprises S$100 million to be distributed over four years until Keppel REIT’s 20th Anniversary in 2026.
Units of the commercial REIT sport a distribution yield of 6.4%.
Keppel REIT enjoyed a high occupancy of 96.3% along with a long portfolio weighted average lease expiry (WALE) of six years.
Its aggregate leverage came in at 38.4% with three-quarters of its loans secured on fixed rates.
CapitaLand Ascendas REIT (SGX: A17U)
CapitaLand Ascendas REIT, or CLAR, is an industrial REIT that owns 227 properties across Singapore, the UK/Europe, Australia, and the US.
CLAR’s AUM stood at S$16.4 billion as of 31 December 2022.
The REIT reported a respectable set of earnings for 2022, with gross revenue rising 10.3% year on year to S$1.35 billion.
NPI rose 5.2% year on year to S$968.8 million while DPU increased by 3.5% year on year to S$0.15798.
Units of the industrial REIT yielded 5.6%.
CLAR’s portfolio enjoyed a high occupancy rate of 94.6% and saw an 8% positive rental reversion for the year.
Gearing stood at 36.3% with nearly 80% of the REIT’s loans on fixed rates.
CLAR has ongoing projects costing S$617.4 million that should benefit the REIT’s DPU in the years to come.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail cum commercial REIT with a portfolio of 21 properties in Singapore, two in Germany, and three in Australia.
The REIT’s AUM came in at S$24.2 billion as of 31 December 2022.
CICT reported a resilient set of results for 2022 with a year on year rise in both revenue and NPI.
Gross revenue came in 10.5% higher year on year at S$1.4 billion while NPI improved by 9.7% year on year to S$1 billion.
DPU for 2022 stood at S$0.1058, up from the S$0.104 paid out a year ago.
CICT’s units provide a trailing distribution yield of 5.4%.
Aggregate leverage stood at 40.4% with a low cost of debt of 2.7%. 81% of its loans are on fixed rates, mitigating a sharp increase in finance costs.
Mapletree Pan Asia Commercial Trust (SGX: N2IU)
Mapletree Pan Asia Commercial Trust, or MPACT, is a retail and commercial REIT with 18 properties spread out across Singapore, Hong Kong, China, Japan, and South Korea.
These properties were valued at S$17.1 billion as of 31 March 2022.
For the first nine months of fiscal 2023 (9M FY2023), MPACT reported a commendable set of results.
Gross revenue jumped 58.5% year on year to S$592.9 million while NPI climbed 56% year on year to S$454.6 million.
DPU crept up 8.1% year on year to S$0.0736.
Annualised DPU stood at S$0.098133, giving MPACT’s units a forward distribution yield of 5.7%.
Portfolio committed occupancy stood high at 95.5% with a healthy tenant retention rate of 70.3%.
MPACT has an ongoing asset enhancement initiative at its flagship VivoCity asset to reconfigure around 80,000 square feet of space.
The new spaces will open progressively from the middle of this year.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, owns 85 properties in Singapore and 56 in the US with a total AUM of S$8.8 billion as of 31 December 2022.
The REIT reported a mixed set of earnings for its fiscal 2023’s third quarter (3Q FY2023).
Gross revenue rose 5% year on year to S$170.4 million while NPI increased 4.9% year on year to S$128.8 million.
DPU, however, slipped by 2.9% year on year to S$0.0339.
The industrial REIT’s trailing 12-month DPU came in at S$0.1373, giving its units a trailing distribution yield of 5.8%.
Gearing stood at 37.2% as of 31 December 2022 and the REIT had 74.3% of its loans on fixed rates.
Its redevelopment project is proceeding smoothly, with a temporary occupation permit secured for 165 Kallang Way back in November last year.
This property should start contributing positively to revenue and NPI for this calendar year.
Not sure which REIT to put your money in? Use our 7-step REIT checklist to find one that fits into your retirement plan. Checklist is inside our latest FREE report “Singapore REITs Retirement Plan”. Click here to download it now.
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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust.