The final earnings season of 2024 has drawn to a close, offering investors a clearer picture of how real estate investment trusts (REITs) are navigating a challenging economic landscape.
Most REITs are facing twin pressures of a high interest rate environment that increased financing costs, along with an unfavourable foreign currency translation due to the strength of the Singapore dollar.
These headwinds weighed heavily on their financial performance, resulting in weaker results for most.
Amidst the gloom, however, five REITs stood out by delivering better results for the quarter ended 30 September 2024.
Let’s take a closer look at what sets them apart.
1. AIMS APAC REIT (SGX: O5RU)
AIMS APAC REIT (SGX: O5RU) focuses on industrial, logistics, and business park properties, where it has a diversified portfolio comprising 25 assets in Singapore and three in Australia as of 30 September 2024.
For the first half of the fiscal year ending 31 March 2025 (1H FY2025), AA REIT reported strong set of financial results, with gross revenue rising 7.7% year on year to S$93.5 million.
Net property income (NPI) also improved by 5.1% year on year, reaching S$67.6 million.
Distributable income to unitholders climbed 5% year on year to nearly S$38 million, while distribution per unit (DPU) edged up by 0.4% year on year to S$0.0467.
This marginal increase was achieved despite an enlarged unitholder base following the successful S$100 million equity fundraising in 1H FY2024.
Operationally, the REIT maintained a high portfolio occupancy rate of 95%, along with a robust rental reversion of 16.9%, as reported during the period.
On the capital management front, AA REIT demonstrated prudent financial stewardship with an aggregate leverage ratio of 33.4% as of 30 September 2024, and an interest coverage ratio of four times.
The REIT’s all-in borrowing cost stood at 4.4%, with 74% of its debt secured at fixed interest rates, underscoring its resilience against rising interest rates.
2. CapitaLand India Trust (SGX: CY6U)
CapitaLand India Trust (CLINT) holds the distinction of being Asia’s first Indian property trust, focusing on real estate primarily used as business spaces in India.
As of 30 June 2024, the business trust manages a well-diversified portfolio comprising 10 IT business parks, one logistics park, three industrial facilities, and four data centres, spread across five key cities in India.
Together, these assets bring CLINT’s total assets under management (AUM) to an impressive S$3.2 billion.
For the nine months ended 30 September 2024 (9M 2024), CLINT delivered a strong financial performance. Total property income surged 19% year on year to almost S$205 million, while NPI increased by 18% year on year to around S$157 million.
CLINT maintained a solid portfolio occupancy rate of 91%, inclusive of newly-acquired properties, as of 30 September 2024.
The REIT’s weighted average lease expiry (WALE) stood at 3.5 years, providing a balance of tenant stability and renewal opportunities.
From a capital management perspective, CLINT’s gearing ratio was at 40.1% as of 30 September 2024, with an interest coverage ratio of 2.6 times and a cost of debt at 6.0%.
The business trust has also taken proactive measures to manage interest rate risks, with 80.3% of its borrowings hedged into fixed rates, offering a buffer against potential rate volatility.
3. CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust (CICT), Singapore’s largest-listed REIT, boasting a market capitalisation of S$14 billion as of 31 July 2024.
CICT’s portfolio spans 21 retail and office properties in Singapore, alongside two assets in Frankfurt, Germany, and three in Sydney, Australia.
Collectively, the REIT’s portfolio was valued at S$24.5 billion as of 31 December 2023.
For the first nine months of 2024 (9M 2024), CICT delivered a stable financial performance, with gross revenue rising 2.0% year on year to S$1.2 billion, and NPI climbing 5.4% year on year to a little over S$872 million.
The growth was driven by higher gross rental income from existing properties and lower operating expenses.
The REIT has maintained a robust portfolio occupancy of 96.4%, with a weighted average lease expiry (WALE) of 3.5 years as of 30 September 2024.
On the financial front, CICT reported an aggregate leverage of 39.4% as of 30 September 2024, with an interest coverage ratio of three times and an average cost of debt of 3.6%.
The REIT has 76% of its total borrowings hedged at fixed rates, providing a buffer against rising interest rates.
4. Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust (MIT) invests in industrial and data centre properties across Singapore, the United States, and Japan.
As of 30 September 2024, its portfolio comprises 140 properties valued at S$8.9 billion, including 83 properties in Singapore, 56 in North America, and one in Japan.
For the first half of the fiscal year 2025 ending 31 March 2025 (1H FY2025), the REIT reported a 3.5% year-on-year increase in gross revenue to nearly S$357 million, while NPI rose by 2.9% year on year to S$267 million.
These gains were driven by contributions from its newly acquired data centre in Osaka, Japan, alongside improved performance from existing assets.
Distributions to unitholders climbed 2.8% year on year to a little over S$193 million, while DPU rose by 1.3% year on year to S$0.068.
Meanwhile, the REIT maintained a healthy overall portfolio occupancy of 92.9% for 2Q’FY25, with positive rental reversions averaged 10.7% for renewal leases across its Singapore property segments.
MIT continues to demonstrate prudent financial management.
As of 30 September 2024, its aggregate leverage stood at 39.1%, with interest coverage at 4.7 times for the trailing 12 months and an average borrowing cost of 3.2% for 2Q’FY25.
Notably, 80.4% of its total borrowings are hedged at fixed rates, reflecting a strong focus on mitigating interest rate risks.
5. Starhill Global REIT (SGX: P40U)
Starhill Global REIT (SGREIT) focuses on retail and office properties across Singapore, Australia, Malaysia, Japan, and China.
As of 30 June 2024, its portfolio of nine assets was valued at approximately S$2.8 billion.
In the first quarter of FY2025 ending 30 June 2025 (1Q FY2025), SGREIT delivered a modest year-on-year increase in financial performance.
Gross revenue rose 1.9% year on year to S$48 million, while NPI climbed 1.4% year on year to S$37.9 million, showcasing resilience amidst a challenging environment.
SGREIT boasts a robust portfolio occupancy rate of 97.6% as of the end of 1Q FY2025, supported by a weighted average lease expiry (WALE) of 7.6 years by net lettable area.
SGREIT’s capital management remains sound, with a gearing ratio of 37.2% as of 30 September 2024, offering financial flexibility while staying comfortably within regulatory limits.
The REIT maintains an interest coverage ratio of 3.1 times, with an average annual interest rate of 3.8%.
Furthermore, 81% of its borrowings are hedged at fixed rates, insulating it against potential interest rate volatility.
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Disclaimer: Lim Jun Yuan owns shares of CapitaLand India Trust, CapitaLand Integrated Commercial Trust, and Mapletree Industrial Trust.
