To The Moon

The REIT sector has been a dependable source of dividends for income-seeking investors.

REITs are mandated to pay out at least 90% of their earnings as distributions.

These dividends act as a source of passive income that can boost your earned income.

It is even better for income investors if a REIT can increase its distribution per unit (DPU) over time.

This increase can allow them to beat inflation and ensure that their stream of passive income continues to rise.

Here are four Singapore REITs that display a high probability of raising their DPUs.

Frasers Centrepoint Trust

Frasers Centrepoint Trust, or FCT, is a retail REIT with a portfolio of 10 suburban retail malls and an office building.

The REIT’s assets under management (AUM) stood at S$6.9 billion as of 25 October 2023.

FCT reported a mixed set of earnings for its fiscal 2023 (FY2023) ending 30 September 2023.

Gross revenue rose 3.6% year on year to S$369.7 million while net property income (NPI) increased by 2.7% year on year to S$265.6 million.

DPU, however, dipped slightly by 0.6% year on year to S$0.1215.

The REIT manager has been active in portfolio rejuvenation and capital recycling activities.

During FY2023, FCT acquired a 25.5% stake in NEX Mall while increasing its stake in Waterway Point by 10%.

It also carried out an asset enhancement initiative (AEI) at Tampines 1 and divested Changi City Point.

Back in January 2024, FCT announced that it was upping its stake in NEX Mall to 50%.

These acquisitions will boost FCT’s DPU and asset base, increasing the chances that it can deliver a DPU increase for FY2024.

Mapletree Logistics Trust

Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties across eight countries.

Its total AUM stood at S$13.3 billion as of 31 December 2023.

The logistics REIT also reported a mixed performance for the first nine months of fiscal 2024 (9M FY2024).

Gross revenue inched up 0.2% year on year to S$552.9 million but NPI dipped by 0.2% year on year to S$479.6 million.

DPU improved by 0.7% year on year to S$0.06792.

MLT has concluded a string of acquisitions for 9M FY2024 comprising nine properties in Japan (6), South Korea (1), Australia (1), and India (1).

In addition, the REIT purchased another three modern logistics properties in Malaysia and Vietnam in late February 2024 that will add to its DPU.

Elsewhere, MLT also has an ongoing asset enhancement – a redevelopment project at 51 Benoi Road in Singapore that will increase the gross floor area (GFA) by 2.3 times to 887,000 square feet.

Parkway Life REIT

Parkway Life REIT is a healthcare REIT with a portfolio of 63 properties comprising three hospitals in Singapore, 59 nursing homes in Japan, and strata-titled units in a specialist centre in Malaysia.

The healthcare REIT’s AUM stood at S$2.23 billion as of 31 December 2023.

PLife REIT reported an encouraging set of earnings for 2023 with gross revenue increasing 13.5% year on year to S$147.5 million.

NPI improved by 14.1% year on year to S$139.1 million.

DPU rose by 2.7% year on year to S$0.1477.

The healthcare REIT maintains a low cost of debt of 1.27% with gearing at just 35.6%.

PLife REIT’s master lease renewal for its three Singapore hospitals means there is a step-up rental till 2042, allowing the REIT to enjoy organic rental growth.

The REIT also has a 10-year right-of-first-refusal option to acquire Mount Elizabeth Novena.

CapitaLand Integrated Commercial Trust

CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with a portfolio of 21 properties in Singapore, two properties in Germany, and three properties in Australia.

The REIT’s AUM stood at S$24.5 billion as of 31 December 2023.

Gross revenue for 2023 increased by 8.2% year on year to S$1.6 billion while NPI jumped 7% year on year to S$1.1 billion.

CICT’s DPU increased from S$0.1058 in 2022 to S$0.1075 in 2023.

The retail and commercial REIT sported strong operating metrics that should continue to propel its DPU ahead.

The portfolio committed occupancy stood at 97.3%, showcasing strong demand for CICT’s portfolio of high-quality properties.

Moreover, both the retail and commercial divisions also enjoyed positive rental reversions of 8.5% and 9%, respectively, for 2023.

The REIT manager has concluded an AEI at CQ @ Clarke Quay with a committed occupancy of 85%.

Meanwhile, CICT is embarking on AEIs for the IMM Building, Gallileo, and 101 Miller Street.