SINGAPORE: Looking to Real Estate Investment Trusts (REITs) for steady returns? REITs can be a reliable source of income but not all REITs are equal.
Here are five REITs with strong sponsors and portfolios, as recommended by The Smart Investor.
1. Mapletree Logistics Trust
Backed by Mapletree Investments Pte Ltd, a global real estate firm managing S$77.4 billion of properties as of March 31, 2023, Mapletree Logistics Trust (MLT) operates with assets worth S$13.3 billion across eight countries.
MLT reported stable earnings for fiscal 2024, with gross revenue of S$552.9 million and net property income (NPI) of S$479.6 million. Despite minor fluctuations, its distribution per unit (DPU) increased slightly to S$0.06792.
MLT boasts a 95.9% portfolio occupancy and a 3.8% positive rental reversion, indicating healthy demand for its properties.
2. Frasers Logistics & Commercial Trust
Frasers Logistics & Commercial Trust (FLCT), with a portfolio worth S$6.7 billion, operates across multiple countries including, Singapore, Australia, the UK, Germany, and the Netherlands.
Sponsored by Frasers Property Limited, a property developer with total assets of S$40.1 billion as of March 31, 2023, FLCT showed resilience in its recent fiscal 2024 first quarter, boasting high occupancy rates and a strong positive rental reversion of 18.2%.
With a portfolio occupancy of 95.8%, along with a DPU of S$0.0704, FLCT offers an enticing investment prospect.
3. Keppel DC REIT
With assets worth S$3.7 billion spanning nine countries, Keppel DC REIT is backed by blue-chip asset manager Keppel Ltd. Despite a slight decrease in DPU to S$0.09383 due to provisions, its gross revenue increased to S$281.2 million, reflecting the robust demand for data centre properties.
With a portfolio occupancy of 98.3%, Keppel DC REIT remains an attractive option for investors seeking stable returns.
4. CapitaLand Integrated Commercial Trust
CapitaLand Integrated Commercial Trust (CICT), with a diverse portfolio worth S$24.5 billion, operates across multiple countries including Singapore, Germany, and Australia.
Sponsored by CapitaLand Investments Limited, a real estate investment manager with S$134 billion of assets under management and S$100 billion of funds under management as of December 31, 2023, CICT demonstrated solid performance in 2023, with significant increases in gross revenue and net property income.
With 97.3% portfolio occupancy and positive rental reversions for both retail and commercial segments, along with a DPU of S$0.1075, CICT presents itself as a compelling investment opportunity.
5. CapitaLand Ascendas REIT
CapitaLand Ascendas REIT (CLAR) holds a portfolio of 232 properties in multiple countries, with assets worth S$16.9 billion.
Sponsored by CapitaLand Investment Limited, CLAR demonstrated strong performance in 2023, with notable increases in revenue and net property income. Despite a decrease in DPU to S$0.1516, attributed to an increase in issued units, CLAR boasts 94.2% portfolio occupancy and 13.4% positive rental reversion, making it an attractive option for income investors.
While REITs offer attractive income opportunities, investors should carefully assess their options. REITs with strong sponsors, diverse portfolios, and stable financial performance, like the ones mentioned above, are likely to provide consistent returns over the long term. /TISG
Read also: 4 Singapore REITs with higher dividend yields than CPF OA & SSB
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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