The REIT sector is enjoying a reprieve as inflation moderates and interest rates were slashed last year.
Investors who rely on REITs for a stream of passive income will be pleased to see distributions holding steady or even rising this year.
When scouting for reliable REITs, it’s important to look for other attributes such as a strong sponsor and a portfolio of high-quality, sought-after properties.
We highlight four such REITs that also sport a dividend yield of 5.5% or higher.
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 total assets under management (AUM) stood at S$26 billion as of 31 December 2024.
CICT not only has a strong sponsor in blue-chip real estate investment manager CapitaLand Investment Limited (SGX: 9CI), but also reported a commendable set of earnings for 2024.
Gross revenue inched up 1.7% year on year to S$1.6 billion while net property income (NPI) increased 3.4% year on year to S$1.15 billion.
Distribution per unit (DPU) edged up 1.2% year on year to S$0.1088.
At a unit price of S$1.19, CICT’s shares offer a trailing distribution yield of 5.5%.
CICT portfolio stayed resilient amid the tough macroeconomic backdrop, with committed portfolio occupancy staying high at 96.7%.
Rental reversion also came in positive at 8.8% for its retail portfolio and 11.1% for its office portfolio for 2024.
The positive rental reversions attest to the strong demand for the REIT’s properties.
Meanwhile, CICT has two ongoing asset enhancement initiatives (AEIs) to drive organic rental growth for the portfolio.
One is for the IMM Building in Singapore while the other is for Gallileo in Germany.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 141 properties spread across the US (56), Singapore (83), and Japan (2).
As of 31 December 2024, MIT’s total AUM stood at S$9.2 billion.
The REIT has a strong sponsor in Mapletree Investments Pte Ltd and also reported a respectable set of earnings for the third quarter of fiscal 2025 (3Q FY2025) ending 31 December 2024.
Gross revenue improved by 2% year on year to S$177.3 million.
NPI did better, increasing by 2.6% year on year to S$133.2 million.
DPU crept up 1.5% year on year to S$0.0341.
MIT’s trailing 12-month DPU stood at S$0.1357, giving its units a trailing distribution yield of 6.4% at a unit price of S$2.13.
Portfolio occupancy stayed healthy at 92.1% and the portfolio also registered a positive rental reversion of 9.8% for renewal leases.
MIT just concluded the acquisition of a freehold property in Tokyo, Japan for around S$133.6 million.
This property is well-located and has the potential to be redeveloped into a new data centre.
OUE REIT (SGX: TS0U)
OUE REIT is a diversified REIT with a portfolio of six office, hospitality, and retail properties in Singapore.
Total AUM stood at S$5.8 billion as of 31 December 2024.
The REIT has a strong sponsor in real estate and healthcare group OUE Limited (SGX: LJ3).
OUE REIT reported a mixed set of earnings for 2024 with revenue rising 3.7% year on year to S$295.5 million.
NPI, however, dipped by 0.4% year on year to S$234 million.
A jump in finance costs was offset by better results from joint ventures, and the REIT reported that DPU suffered a slight 1.4% year-on-year decline to S$0.0206.
At a unit price of S$0.275, units of OUE REIT sport a trailing distribution yield of 7.5%.
The REIT saw its office segment command a high committed portfolio occupancy level of 94.6%.
This division also registered a positive rental reversion of 10.7% for the year.
As for Mandarin Gallery, the retail portion of the portfolio, it enjoyed a high occupancy of 98.2% along with a positive rental reversion of 19.8% for 2024.
CDL Hospitality Trusts (SGX: J85)
CDL Hospitality Trusts, or CDLHT, is a hospitality trust with a portfolio of 22 properties and an AUM of about S$3.5 billion as of 31 December 2024.
The trust has a reputable sponsor in blue-chip real estate giant City Developments Limited (SGX: C09).
Like OUE REIT, CDLHT also reported a mixed set of earnings for 2024.
Revenue inched up 1% year on year to S$260.3 million but NPI dipped by 2.2% year on year to S$135.2 million.
Distribution per stapled security (DPSS) fell by 6.7% year on year to S$0.0532.
At a unit price of S$0.825, shares of CDLHT offer a trailing distribution yield of 6.4%.
During 2024, the trust made its maiden foray into the purpose-built student accommodation (PBSA) sector with the acquisition of Benson Yard, a new PBSA within Liverpool in the UK.
CDLHT also conducted AEIs to refurbish the rooms and public areas in Ibis Perth and Grand Millennium Auckland.
The trust has a healthy gearing level of 40.7% with debt headroom of S$610 million before it hits the statutory limit of 50%.
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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust.
