The final reporting season for this year has begun.
As usual, the REIT sector is the first in line to release its results and business updates.
Investors will be keenly observing the REITs’ key statistics and financial performance to determine if distributions can rise.
The good news is that the twin headwinds of high inflation and elevated interest rates may be abating soon.
The Federal Reserve just made its first interest rate cut back in September while core inflation in Singapore has eased from the highs of between 4% to 5%.
Here are three Singapore REITs that recently announced their final results and also provide distribution yields of 5.3% or higher.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 186 properties spread across eight countries.
The REIT has assets under management (AUM) of S$13.4 billion as of 30 September 2024.
MLT announced a downbeat set of results for its second quarter and first half of fiscal 2025 (2Q FY2025 and 1H FY2025) ending 30 September 2024.
For 1H FY2025, gross revenue dipped by 1.1% year on year to S$365 million.
The decline was due to lower contributions from China, the absence of contributions from divested properties, and the depreciation of various currencies against the Singapore dollar.
Net property income (NPI) came in 1.5% lower year on year at S$315.3 million.
Distribution per unit (DPU) fell by 9.8% year on year to S$0.04095.
MLT’s trailing 12-month DPU stood at S$0.08559, giving its units a trailing distribution yield of 6.2%.
The REIT’s portfolio occupancy stood high at 96% but average rental reversion came in at negative 0.6%, impacted by MLT’s crop of China properties.
Excluding China, rental reversion would have been positive at 3.6%.
As of 30 September 2024, MLT’s aggregate leverage stood at 40.2% with its cost of debt staying constant quarter-on-quarter at 2.7%.
Three acquisitions were completed year-to-date involving properties in Kuala Lumpur, Ho Chi Minh City, and Hanoi.
The REIT also divested eight properties with older specifications as part of its capital recycling initiatives.
However, the manager warned that higher borrowing costs will continue to exert pressure on the REIT’s DPU in the coming quarters.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of nine suburban malls and an office building.
The REIT had an AUM of S$7.1 billion as of 30 September 2024.
FCT reported a resilient set of financial results for its fiscal 2024 (FY2024) ending 30 September 2024.
Gross revenue dipped by close to 5% year on year to S$351.7 million while NPI fell by 4.6% year on year to S$253.4 million.
The declines were due to the absence of contributions from Changi City Point which was divested in October 2023, along with lower contributions from Tampines 1 Mall during asset enhancement initiative (AEI) works.
If these two factors were excluded, revenue and NPI for FY2024 would have been higher by 3.5% and 3.4%, respectively.
DPU fell by a gentle 0.9% year on year to S$0.12042, giving the retail REIT’s units a trailing distribution yield of 5.3%.
FCT sported healthy operating statistics with retail committed occupancy stable at 99.7%.
Rental reversion came in at 7.7% for FY2024, higher than the prior fiscal year’s 4.7%.
Tenant sales and shopper traffic also showed improvement, rising by 1.2% and 4.2%, respectively.
FCT recently completed its AEI of Tampines 1 Mall and achieved a return on investment exceeding 8%.
Its next AEI is for Hougang Mall which is slated to commence in 2Q 2025 and be completed by 3Q 2026.
Mapletree Pan Asia Commercial Trust (SGX: N2IU)
Mapletree Pan Asia Commercial Trust, or MPACT, is a retail and commercial REIT with a portfolio of 17 properties across four countries – Singapore, China/Hong Kong, Japan, and South Korea.
These properties have a total net lettable area of 10.5 million square feet and are valued at S$15.5 billion as of 30 September 2024.
Like MLT, MPACT also released its 2Q FY2025 and 1H FY2025 results recently.
For 1H FY2025, revenue dipped by 3.1% year on year to S$462.3 million while NPI fell by 4.2% year on year to S$347.1 million.
The weakness was because of lower contributions from overseas assets, the absence of contribution from the divested Mapletree Anson, and the continued strength of the Singapore Dollar.
DPU tumbled by 7.9% year on year to S$0.0407.
MPACT’s trailing 12-month DPU stood at S$0.0856, giving its units a trailing distribution yield of 6.1%.
The REIT’s portfolio occupancy dipped to 90.3% this quarter, down from 94% in the previous quarter.
China properties saw occupancy continue to dip to 87.1% from 88.9% a year ago while MPACT’s Japan properties recorded occupancy of 82.3%, down sharply from 97.3% a year ago.
The portfolio’s rental reversion rate stood at positive 4.1% but China, Japan, and Hong Kong continued to report negative rental reversions for 1H FY2025.
MPACT’s crown jewel, VivoCity, is undergoing a phased AEI that should increase retail lettable area by 14,000 square feet once completed.
The estimated return on investment is 10% and the AEI should be completed by the end of 2025.
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Disclosure: Royston Yang does not own any of the companies mentioned.
