It’s earnings season again! REITs have always been one of the favourite investment choices for risk-averse investors due to its stable earnings qualities.
In this article, I will look at two REITs that have lived up to their investors’ expectation by delivering positive performance in their latest earnings updates.
Disclaimer: This is not a sponsored post. Opinions expressed in the article by the author should not be taken as investment advice. Please do your own research and due diligence.
1. Frasers Centrepoint Trust
The first REIT on the list is Frasers Centrepoint Trust (SGX: J69U) or FCT. As a quick introduction, FCT is a REIT with property portfolio comprising of suburban retail malls such as Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), and Changi City Point.
For the quarter ended 31 March 2019, FCT reported that gross revenue for the reporting quarter grew 2.3% to S$49.7 million while net property income (NPI) improved by 4.8% to S$36.4 million.
Similarly, the REIT’s distribution per unit (DPU) was up by 1.2% year-on-year to 3.137 cents, mainly due to the higher NPI.
Dr Chew Tuan Chiong, chief executive of the REIT’s manager, commented:
“We are pleased that FCT has delivered a very good set of results with a record-high DPU this quarter.
The net property income grew an impressive 4.8% year-on-year, led by Changi City Point which continues its growth momentum.
The portfolio also registered positive 2% average rental reversion, bringing the year-to-date portfolio rental reversion to 5.4%.
We expect our portfolio of suburban malls to maintain steady performance.
Going forward, we will continue to focus on improving the financial performance of FCT as well as on acquisition strategies to drive further growth.”
As of 31 March 2019, the REIT’s gearing stood at 28.8% and its committed occupancy rate was 96.0%.
2. Mapletree Industrial Trust
The next REIT on the list is Mapletree Industrial Trust (SGX: ME8U) or MIT. As a quick introduction, MIT has 87 industrial properties and 14 data centres in the US (through its 40% joint venture).
For the quarter ended 31 March 2019, MIT’s gross revenue grew 5.6% year-on-year to S$98.8 million while NPI rose 5.5% year-on-year to S$75.9 million.
The improvement was primarily due to income contribution from development projects, as well as contributions from new properties.
Similarly, the REIT’s distribution per unit (DPU) inched up by 0.3% year-on-year to 3.08 cents.
Mr Tham Kuo Wei, chief executive of MIT’s REIT manager, made the following comments:
“MIT achieved another year of strong financial performance in FY18/19 with contributions from investment projects within the Hi-Tech Buildings segment.
We made further strides in our strategy of growing this segment with the completion of the build-to-suit data centre development Mapletree Sunview 1 and the accretive acquisition of 18 Tai Seng during the financial year.
To deliver sustainable returns, we will continue to explore acquisitions as well as build-to-suit and development opportunities.”
As of 31 March 2019, the REIT’s gearing was 33.8% and its committed occupancy rate stood at 90.2%.
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