The REIT sector had to endure more than two years of challenges as surging interest rates and soaring inflation ate into REITs’ results.
Many REITs had to grapple with higher operating and finance costs, which crimped their distributable income and, by extension, their distribution per unit (DPU).
Income investors need to filter out strong and reliable REITs that can weather these challenges and emerge relatively unscathed.
These REITs should possess strong sponsors, a robust portfolio of properties, with a manager that focuses on acquisitions and capital recycling to deliver sustainable returns.
Here are three high-quality Singapore REITs that can help fortify your portfolio during tough times.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 141 properties spread across Singapore (83), the US (56), and Japan (2).
The REIT had assets under management (AUM) of S$9.1 billion as of 31 March 2025.
MIT is supported by a strong sponsor in Mapletree Investments Pte Ltd, an investment firm that manages a diverse portfolio of real estate assets worth S$80.3 billion as of 31 March 2025.
The REIT is one of several that managed to increase its DPU.
For its fiscal 2025 (FY2025) ending 31 March 2025, MIT saw gross revenue rise 2.1% year on year to S$711.8 million.
Net property income (NPI) inched up 2% year on year to S$531.5 million while DPU crept up 1% year on year to S$0.1357.
The REIT manager announced proactive asset management moves to manage the impact of vacancies in its North American data centres.
These include reletting by extending leases or backfilling vacant spaces, repositioning assets through redevelopments, and rebalancing the portfolio through the divestment of non-core properties.
Portfolio occupancy remained high at 91.6% for FY2025, and the industrial REIT registered a positive rental reversion of 8.1% for renewal leases in its Singapore portfolio.
The manager was also active in acquisitions, as it announced the purchase of an Osaka data centre back in May 2023.
The fitting out of this data centre was done in four phases and was completed back in May this year.
That same month, MIT also announced the divestment of three properties in Singapore for S$535.3 million at a small premium to the properties’ valuation.
Although the sale will slightly lower DPU, it will reduce MIT’s aggregate leverage to 37% (from 40.1%) and improve portfolio occupancy to 92%.
CapitaLand Ascendas REIT (SGX: A17U)
CapitaLand Ascendas REIT, or CLAR, is Singapore’s oldest industrial REIT and owns a portfolio of 226 properties with an AUM of S$16.9 billion as of 31 March 2025.
The REIT is anchored by a strong sponsor in blue-chip CapitaLand Investment Limited (SGX: 9CI), which manages S$117 billion of funds under management.
Like MIT, CLAR is also one of several REITs to report a slight year-on-year DPU increase.
DPU for 2024 inched up 0.3% year on year to S$0.15205 on the back of a 2.9% year-on-year improvement in gross revenue to S$1.52 billion.
The REIT’s first quarter of 2025 (1Q 2025) business update also displayed strong operating metrics.
Portfolio occupancy stood high at 91.5% and the portfolio enjoyed a positive rental reversion of 11%.
Back in May, the manager announced a yield-accretive acquisition of two fully occupied industrial properties in Singapore.
This purchase is poised to add 1.36% to CLAR’s 2024 DPU and also opens up the properties to organic growth potential that can increase their rental income in the future.
Meanwhile, CLAR is also undertaking ongoing projects worth S$498.4 million to improve the returns on its existing portfolio.
These projects, which include redevelopments and refurbishments, should be completed from 3Q 2025 to 1Q 2028.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT is a healthcare REIT with a portfolio of three hospitals in Singapore, 60 nursing homes in Japan, and 11 nursing homes in France.
The REIT used to own a strata-titled medical centre in Malaysia, but this asset was divested after 1Q 2025.
Parkway Life REIT has a strong sponsor in IHH Healthcare Berhad (SGX: Q0F), an integrated healthcare player that owns hospitals and clinics in Singapore, Malaysia, and Turkey.
The healthcare REIT has a stellar DPU track record, having reported uninterrupted core DPU increases since its IPO in 2007.
Its 1Q 2025 business update was equally impressive.
Gross revenue and NPI increased by 7.3% and 7.5% year on year, respectively, to S$39 million and S$36.8 million.
DPU continued its rise, increasing 1.3% year on year to S$0.0384.
Parkway Life REIT announced a major acquisition of 11 nursing homes in France last year for €112 million.
This purchase adds a third key market for the healthcare REIT that can provide DPU growth and diversification.
The REIT’s gearing remained reasonable at 36.1% with a low all-in cost of debt of just 1.5%.
With a healthy interest cover ratio of 9.3 times, Parkway Life REIT can tap into more debt financing for more yield-accretive acquisitions in the future.
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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust.
