facebook3 REITs That Are Giving Investors Bigger "Ang Baos" This Ox Year

3 REITs That Are Giving Investors Bigger "Ang Baos" This Ox Year

profileSudhan P

Real estate investment trusts (REITs) are well-known for their income-producing ability. 

One of the factors I look out for before investing in a REIT is whether it is increasing its distribution per unit (DPU). DPU is money that investors receive from investing in REITs. 

If a REIT’s DPU manages to climb consistently each year, it could mean that the REIT has a strong business. 

With that, here’s a look at three Singapore-listed REITs that raised their DPUs recently, amid DPU cuts by many others. 

TL;DR: 3 REITs That Posted Higher DPU Recently

110221_3 REITs DPU_Seedly

Here’s a five-second summary: 

  • Keppel DC REIT updated the market that its 2020 DPU surged 21% to 9.17 Singapore cents. 
  • Mapletree Logistics Trust’s third-quarter DPU grew 1% to 2.065 Singapore cents.
  • Parkway Life REIT’s 2020 DPU increased by 4.5% to 13.79 Singapore cents.

Discuss Everything About REITs Right Here!

REIT #1: Keppel DC REIT

Keppel DC REIT (SGX: AJBU) is a data centre REIT with a portfolio of over 15 data centre assets located in eight countries in Asia Pacific and Europe. 

Keppel DC REIT is also featured in our Investing in 2021: 9 Stocks to Consider Buying for the New Year report. 

The REIT saw robust growth for the whole of 2020. 

Gross revenue, net property income, and DPU all grew strongly on a year-on-year basis. 

270121_Keppel DC REIT 2020 earnings_Seedly

The strong performance was on the back of full-year contributions from Keppel DC Singapore 4 and DC1 as well as new acquisitions in Europe.

DPU for 2020 increased by around 21% to 9.17 Singapore cents, up from 7.61 Singapore cents a year back. 

Keppel DC REIT ended off the year with a strong balance sheet as well.

As of 31 December 2020, it had a gearing ratio of 36.2%, below the 40% threshold that I look for in REITs. Its interest coverage ratio also remains high at around 13x. 

Here’s a visual summary of Keppel DC REIT’s 2020 earnings update:

Keppel DC REIT 2020 Financial Results Highlights
Source: Keppel DC REIT 2020 earnings presentation

Keppel DC REIT’s units are currently changing hands at S$2.97 each. At that unit price, the REIT has a price-to-book (P/B) ratio of 2.5x and a distribution yield of 3.1%. 

REIT #2: Mapletree Logistics Trust

Mapletree Logistics Trust (SGX: M44U) is another REIT featured in our 2021 stocks report

The logistics REIT, as of 31 December 2020, had a portfolio of 156 logistics assets in Singapore, Hong Kong, Japan, Australia, China, Malaysia, South Korea, and Vietnam.

For Mapletree Logistics Trust’s third quarter ended 31 December 2020 (3Q FY20/21), gross revenue grew 15.5% to S$139.9 million.

The growth was largely due to:

  1. Higher revenue from existing properties; 
  2. Contributions from accretive acquisitions completed in FY19/20 and FY20/21; and 
  3. Contribution from a completed redevelopment of Mapletree Ouluo Logistics Park Phase 2 in Shanghai.

However, rental rebates granted to tenants impacted by COVID-19 and the absence of contribution from a property divested in FY19/20 partially offset the gross revenue growth.

With property expenses increasing around 20% for the quarter, Mapletree Logistics Trust’s net property income rose 14.9% to S$124.7 million. 

For the latest quarter, DPU increased by 1% to 2.065 Singapore cents, up from 2.044 cents a year ago. For the nine months ended December 2020, DPU rose 1.2% to 6.165 cents. 

As of 31 December 2020, Mapletree Logistics Trust’s balance sheet was healthy with a gearing ratio of 36.8% and an interest cover ratio of 5x. The REIT doesn’t have any debt due in the current financial year. 

Ng Kiat, chief executive of Mapletree Logistics Trust’s manager, said the following about the REIT’s latest results:

“Our 3Q results once again demonstrate the continued resilience of our tenant base and a geographically diversified portfolio. Fortunately, most of our tenants were able to keep their operations stable. However we remain watchful, with the resurgence of virus infections causing disruptions across various cities. We will continue to build and strengthen our geographic network across Asia Pacific, to deliver long term returns to Unitholders.”

At Mapletree Logistics Trust’s unit price of S$1.98, it has a P/B ratio of 1.5x and a distribution yield of 4.1%.

REIT #3: Parkway Life REIT 

Parkway Life REIT (SGX: C2PU) is a healthcare REITs that owns 54 properties located in Singapore, Japan, and Malaysia.

For Parkway Life REIT’s 2020 financial year, gross revenue rose 4.9% year-on-year to S$120.9 million largely due to: 

  1. Contribution from Japanese property acquisitions in December 2019 and 2020;
  2. Higher rent from its Singapore properties; and 
  3. Appreciation of the Japanese Yen. 

Meanwhile, net property income for 2020 rose 4% to S$112.5 million and DPU climbed 4.5% to 13.79 Singapore cents, up from 13.19 cents last year

Just like Keppel DC REIT, the healthcare REIT enjoys a robust balance sheet. As of 31 December 2020, it had a gearing ratio of 38.5% and a high interest coverage ratio of 18x. 

Parkway Life REIT doesn’t have any long-term debt refinancing need till 2022 as well.

At Parkway Life REIT’s unit price of S$4.09, it has a P/B ratio of 2.1x and a distribution yield of 3.4%. 

Want More In-Depth Analysis And Discussion?

Why not check our community at Seedly and participate in the lively discussion surrounding REITs like Parkway Life REIT and many more!

Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer may have a vested interest in the companies mentioned.

About Sudhan P
It isn't fair competition when only one company in the world makes Monopoly. But I love investing in monopolies. Before joining the Seedly hood, I had the chance to co-author a Singapore-themed investment book – "Invest Lah! The Average Joe's Guide To Investing" – and work at The Motley Fool Singapore as an analyst.
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