It has not been an easy time for the REIT sector as the combination of inflation and higher interest rates weigh on distributable income.
Many REITs reported higher operating and finance expenses that put pressure on their distribution per unit (DPU).
Despite the headwinds, there are still a handful of REITs that bucked the trend and reported a higher DPU.
Here are four Singapore REITs that managed to do so.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties spread across eight countries.
The logistics REIT has total assets under management (AUM) of S$13.3 billion as of 31 December 2023.
For the first nine months of fiscal 2024 (9M FY2024), MLT reported a mixed set of financial numbers.
Revenue inched up 0.2% year on year to S$552.9 million but net property income (NPI) dipped by 0.2% year on year to S$479.6 million.
DPU edged up 0.7% year on year to S$0.06792 for 9M FY2024.
MLT reported healthy operating metrics in addition to the increase in DPU.
Portfolio occupancy stood high at 95.9% with an average positive rental reversion of 3.8% for the latest quarter.
The logistics REIT’s aggregate leverage came in at 38.8%, allowing the REIT to gear up for more yield-accretive acquisitions.
MLT also completed the acquisition of nine properties worth over S$900 million year-to-date.
The manager remains active in capital recycling with eight properties sold above their valuations within the same period.
These properties have older specifications and have limited redevelopment potential.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT is a healthcare REIT with a portfolio of 63 properties with a total portfolio size of around S$2.23 billion as of 31 December 2023.
For 2023, the healthcare REIT reported a 13.5% year on year increase in gross revenue to S$147.5 million.
The better performance was attributed to acquisitions made in 2022 and 2023 along with higher rental income from its Singapore hospitals under the new master lease agreement.
NPI improved by 14.1% year on year to S$139.1 million while DPU inched up 2.7% year on year to S$0.1477.
Parkway Life REIT had a moderate gearing of 35.6% as of 31 December 2023 with a low cost of debt of just 1.27%.
The REIT also does not have any refinancing needs till March 2025.
Parkway Life REIT has a strategic investment approach where it plans to deepen or initiate collaborations with existing or new partners for long-term working relationships.
At the same time, the healthcare REIT will use a clustering approach to unlock value from optimised and non-core assets and reinvest the proceeds in higher-yielding assets.
CapitaLand Ascott Trust (SGX: HMN)
CapitaLand Ascott Trust, or CLAS, is a hospitality trust with a portfolio of 106 properties in 45 cities across 16 countries in Asia Pacific, Europe and the US.
Its AUM stood at S$8.7 billion as of 31 December 2023.
Revenue for 2023 increased by 20% year on year to S$744.5 million with total distributable income rising 25% year on year to S$237 million.
Distribution per stapled security rose 16% year on year to S$0.0657.
CLAS’ revenue per available unit (RevPAU) also rose 23% year on year to pre-COVID levels.
During 2023, the hospitality trust invested S$530.8 million in lodging assets while divesting S$260.1 million of mature assets at a premium to book value.
In addition, CLAS also has a pipeline of eight asset enhancement initiatives (AEIs) to improve its properties’ attributes.
The hospitality trust has a healthy gearing of 37.9% along with a low cost of debt of 2.4%.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with a portfolio of 21 properties in Singapore, two in Germany, and three in Australia.
The REIT’s AUM as of 31 December 2023 stood at S$24.5 billion.
CICT reported a commendable set of earnings for 2023.
Gross revenue rose 8.2% year on year to S$1.6 billion while NPI increased by 7% year on year to S$1.1 billion.
The REIT’s DPU for 2023 stood at S$0.1075, 1.6% higher than the S$0.1058 paid out a year ago.
CICT’s operating metrics were robust with the REIT reporting positive rental reversions of 8.5% and 9% for its retail and office portfolios, respectively.
Its retail portfolio also saw tenant sales increasing by 1.8% year on year while shopper traffic climbed 8.6% year on year.
CICT plans to embark on a new AEI for the IMM Building as its current AEI for CQ @ Clarke Quay nears completion.
S$48 million will be spent to elevate the shopper experience and improve overall efficiency with a target return on investment of 8%.
The AEI will be conducted in four phases beginning 1Q 2024 and is slated to be completed by 3Q 2025.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
