SINGAPORE: Singapore’s Real Estate Investment Trusts (REITs) face tough times due to foreign exchange rates and high borrowing costs as benchmark interest rates remain at a 20-year peak.
This has led to a drop in distribution payouts for many REITs. However, according to The Smart Investor, these six Singapore REITs have managed to show improvement in their distributions despite these challenges.
1. CapitaLand India Trust
CapitaLand India Trust (CLINT) is well-positioned to benefit from the booming IT sector in India and the growing logistics and industrial markets. The trust has also been expanding into data centres.
As of June 30, 2024, CLINT’s portfolio includes 10 IT business parks, three industrial facilities, one logistics park, and four data centres in five major Indian cities.
In the first half of 2024 (1H 2024), CLINT reported a strong performance, with total property income up by 23% year-on-year(YoY) to S$136 million and net property income up by 21% YoY to S$104 million. This growth came from higher income from existing and new properties.
As a result, CLINT’s distribution per unit (DPU) increased by 8% YoY to S$0.0364.
2. CapitaLand Integrated Commercial Trust
CapitaLand Integrated Commercial Trust (CICT), Singapore’s largest and first-listed REIT, has a well-diversified portfolio that includes retail and office properties. It currently owns 26 properties, with 21 in Singapore, three in Australia, and two in Germany.
In 1H 2023, CICT saw a 2% YoY increase in gross revenue to S$792 million. This growth was mainly due to better performance from existing properties, although the Gallileo revenue partly offset it due to an ongoing asset enhancement initiative.
Operating expenses fell by 6% compared to the previous year, thanks to lower property management fees and reduced utility costs. As a result, net property income grew by 5%YoY to S$582 million. This led to a 2.5% YoY increase in DPU to S$0.0543.
3. Far East Hospitality Trust
Far East Hospitality Trust (FEHT) manages a diverse portfolio of 12 hotels and serviced residences, offering over 3,000 units worth about S$2.5 billion.
For 1H 2024, FEHT reported a 3.4% YoY rise in gross revenue to approximately S$54 million. This increase was mainly due to higher rental income from its hotel and serviced residence properties and stronger performance from retail and office spaces.
Distributable income to Stapled Securityholders (DPS) grew by 2.7% YoY to S$39.4 million, supported by a 1% rise in net property income. Other gains, including S$2.2 million for covering rising interest costs and S$4.0 million from selling Central Square, contributed to this growth.
As a result, FEHT’s DPS improved by 2.1% YoY to S$0.0196.
4. IREIT Global
IREIT Global, Singapore’s first REIT focused on European assets, manages a diverse portfolio across retail, office, and industrial properties. Its assets include 44 retail properties in France, five office properties in Germany, and four in Spain.
For 1H 2024, IREIT Global saw substantial growth, with gross revenue increasing by nearly 30% to €36.6 million and net property income rising by 23% to €27 million.
This performance was driven by new property acquisitions in France and rental contributions from the Berlin and Darmstadt Campuses.
The DPU for the period increased by 3.2% to €0.0096.
5. Mapletree Industrial Trust
Mapletree Industrial Trust (MIT) focuses on industrial and data centre properties across Singapore, the United States, and Japan. As of 30 June 2024, MIT’s portfolio includes 140 properties with a total valuation of about S$9 billion.
In the first quarter of fiscal 2025, MIT’s gross revenue and net property income grew by 2.7% and 1.3% YoY, reaching S$175.3 million and S$132.5 million, respectively.
This growth was mainly due to income from a newly acquired data centre in Japan and new leases and renewals across its properties.
MIT’s DPU saw a modest increase of 1.2% to S$0.0343.
6. Parkway Life REIT
Parkway Life REIT (PLife REIT) is one of Asia’s largest healthcare-focused REITs, with a diverse portfolio of hospitals and nursing homes.
As of June 30, 2024, its assets include three private hospitals in Singapore, one specialist clinic in Malaysia, and 59 nursing homes and care facilities in Japan, totalling around S$2.2 billion.
In 1H 2024, PLife REIT’s gross revenue fell by 2.7% YoY to S$72.4 million, largely due to a weaker Japanese Yen. However, revenue from two new nursing homes in Japan helped offset this decline.
Net property income dropped by 2.5% to S$68.4 million. Despite these issues, the DPU increased by 3.5% YoY to S$0.0754, thanks to higher income from its Singapore hospitals and selected Japanese nursing homes. /TISG
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Disclaimer: This article is for educational purposes only. It should not be considered Financial or Legal Advice. Investors should conduct their own due diligence before making major financial decisions
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