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REITs have always been a favourite investment choice for risk-averse investors because of their stable earnings quality. Moreover, the better ones can consistently grow their earnings, as well as distribution per unit (DPU), over time.
Let’s take a look at three REITs that have grown their DPU in 2018.
REIT No. 1: CapitaLand Mall Trust (SGX: C38U)
We’ll start with CapitaLand Mall Trust (SGX: C38U), or CMT, a REIT with 15 properties located in the suburban areas and the downtown core of Singapore such as:
- Tampines Mall, Junction 8, Funan, IMM Building, Plaza Singapura, Bugis Junction, and others.
For the year ended 31 December 2018, CMT grew its DPU by 3.0% year on year to 11.5 Singapore cents.
The higher DPU came as a result of higher net property income. For 2018, CMT reported that gross revenue was up 2.2% year on year to S$697.5 million.
Similarly, net property income grew 3.2% year on year to S$125.7 million. The year-on-year improvement in gross revenue and NPI (net property income) was due to acquisitions as well as higher rental income from certain properties.
At its current price of S$2.39, CMT has a distribution yield of 4.8%.
REIT No. 2: Keppel DC REIT (SGX: AJBU)
Next up is Keppel DC REIT (SGX: AJBU), a real estate investment trust involved in data centres. Listed in December 2014, the REIT manages 15 data centres in Asia and Europe.
For the year ended 31 December 2018, Keppel DC REIT grew its DPU by 5.0% year on year to 7.32 Singapore cents.
The higher DPU came as a result of stronger performance in the REIT’s underlying business.
For 2018, Keppel DC REIT reported that gross revenue grew 26.2% year on year to S$175.5 million, while net property income (NPI) improved by 26.0% during the period to S$157.7 million.
At its current price of S$1.44, Keppel DC REIT has a distribution yield of 5.1%.
REIT No. 3: CapitaLand Commercial Trust (SGX: C61U)
CapitaLand Commercial Trust (SGX: C61U), or CCT, is the largest commercial real estate investment trust (REIT) in Singapore by market capitalisation, and it’s managed by CapitaLand Limited (SGX: C31). The REIT has ownership over nine commercial properties in Singapore and one property in Germany.
For the year ended 31 December 2018, CCT grew its DPU by 0.5% year on year to 8.70 Singapore cents. The higher DPU came as a result of growth through new acquisitions.
In 2018, gross revenue grew 16.7% year on year to S$394.0 million, while net property income (NPI) improved by 18.5% during the period to S$314.6 million.
At its current price of S$1.95, CCT has a distribution yield of 4.5%.
REIT No. 4: Capitaland Retail China Trust (SGX: AU8U)
Next on our list is Capitaland Retail China Trust (SGX: AU8U), or CRCT, a Singapore-based real estate investment trust (REIT) investing in retail real estate in China. The trust’s shopping malls are located in China, Hong Kong, and Macau.
For the year ended 31 December 2018, CRCT grew its DPU by 1.2% year on year to 10.22 Singapore cents.
The higher DPU came as a result of higher distributable income.
On the other hand, CRCT reported that gross revenue was down 2.8% year on year to S$222.7 million.
Similarly, net property income fell 1.2% year on year to S$147.4 million. The year-on-year decline in gross revenue and NPI (net property income) was due to the divestment of property.
At its current price of S$1.51, CMT has a distribution yield of 6.8%.
REIT No. 5: Frasers Centrepoint Trust (SGX: J69U)
The final REIT Frasers Centrepoint Trust (SGX: J69U), or FCT, which has a property portfolio comprising of the following suburban retail properties in Singapore:
- Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), Anchorpoint, YewTee Point, Bedok Point, and Changi City Point.
It also holds a 31.15% stake in Hektar Real Estate Investment Trust, a retail-focused REIT in Malaysia.
For the year ended 30 September 2018, FCT grew its DPU by 1.0% year on year to a record 12.015 Singapore cents.
The stronger DPU came as a result of stronger underlying business performance for the year.
In 2018, gross revenue grew 6.5% to S$193.4 million, while net property income improved by 5.9% to S$137.2 million.
At its current price of S$2.24, FCT has a distribution yield of 5.4%.
Conclusion
There you go, five REITs that grew their DPU in 2018.
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