REITs are a perfect investment vehicle for anyone who desires consistent dividends.
With the requirement to pay out at least 90% of their earnings as distributions, REITs deserve a place in any income-seeking investor’s portfolio.
However, of late, this asset class has come under pressure.
A combination of high inflation and surging interest rates has dampened REIT sentiment.
Investors are worried if REITs can sustain their distribution per unit (DPU) in light of these cost pressures.
As a result, many REITs have seen their share prices skidding to year-lows.
Here are four REITs whose share prices have hit new all-time lows.
Investors who remain confident in their prospects may consider adding them to their buy watchlists.
Manulife US REIT (SGX: BTOU)
Manulife US REIT, or MUST, is a pure-play US office REIT with 12 freehold office properties in its portfolio spanning seven states in the US.
MUST’s total assets under management stood at US$2.2 billion as of 31 December 2021.
The REIT’s unit price has half its value year to date and hit an all-time low of US$0.31 recently.
Gross revenue for the first half of fiscal 2022 (1H2022) rose 10.6% year on year to US$100.4 million.
Net property income (NPI) inched up 2.8% year on year to US$57.6 million.
DPU, however, dipped by 3.3% year on year to US$0.0261.
MUST’s portfolio occupancy stood high at 90% as of 30 June 2022 but physical occupancy hovered at just 28% with many employees working from home.
The REIT’s gearing stood at 42.4% with 85.7% of its borrowings on fixed rates.
United Hampshire US REIT (SGX: ODBU)
United Hampshire US REIT, or UHREIT, owns a total of 21 grocery and necessity-based properties along with two self-storage properties, all located in the US.
Total AUM stood at US$732.9 million as of 30 June 2022 (inclusive of an acquisition made on 28 July).
UHREIT saw its unit price skid to an all-time low of US$0.46 and is down 28.4% year to date.
For 1H2022, gross revenue increased 18.5% year on year to US$31.8 million.
NPI increased by 10.6% year on year to US$22.6 million but DPU fell 4.6% year on year to US$0.0291 due to top-ups and stipulated damages.
UHREIT maintained a high portfolio occupancy of 96.2% as of 30 June 2022 and had an aggregate leverage ratio of 38% with 80.5% of its debt on fixed rates.
Elite Commercial REIT (SGX: MXNU)
Elite Commercial REIT owns 155 predominantly freehold commercial properties in the UK with an AUM of £517.7 million as of 30 June 2022.
The REIT saw its unit price slide to an all-time low of £0.46 recently and is down 28.4% year to date.
Revenue rose 17.7% year on year to £18.7 million with distributable income climbing 9.7% year on year to £12.2 million.
DPU, however, was down by 2.7% year on year to 2.56 pence.
The REIT’s gearing stood at 41.9% with 63% of its total loans on fixed rates.
There’s potential rental income upside come April 2023 with Elite going through a rent review with its tenants, many of which have their tenancy agreements indexed to the consumer price index with a minimum increase of 1% and a maximum of 5%.
Cromwell European REIT (SGX: CWBU)
Cromwell European REIT, or CEREIT, has a portfolio of 110 industrial and office properties located in major cities in countries such as France, Finland, Denmark, Germany, and Poland.
The REIT’s AUM stood at €2.6 billion as of 30 June 2022.
CEREIT’s unit price has tumbled to an all-time low of €1.49 and is down 40.7% year to date.
The REIT reported a respectable set of earnings for 1H2022, with revenue up 8.5% year on year to €107.4 million and NPI improving by 4.7% year on year to €67.3 million.
DPU edged up 2.3% year on year to €0.08695.
Earlier this month, CEREIT announced the acquisition of a light industrial asset in Denmark and also completed the divestment of two logistics assets in Germany.
The REIT’s portfolio occupancy remained high at 95.4% as of 30 June 2022.
For 1H2022, a positive rent reversion of 2.9% was recorded.
CEREIT’s aggregate leverage stood at 38.6% with a low all-in interest rate of 1.72%.
Total gross debt is fully hedged and the interest coverage ratio stood at 6.7 times.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
