Yesterday morning, I came across an article written by Mr Chin Hui Leong from The Smart Investors (I have been following articles written by the team since the days of the now defunct “The Motley Fool Singapore”, and was even a subscriber to their “Stock Advisor Singapore” membership programme when I was new to investing back then; I still remembered back when I first started out, I finished reading all of the articles posted on “The Motley Fool Singapore” to learn the nuts and bolts about investing, and got started with it thereafter) titled Singapore’s Top 10 Most Influential REITs with interest, where he highlighted 10 of the biggest REITs in the iEdge S-REIT Index (by market capitalisation) as at 30 June 2021 – You can read more about it from SGX’s website here.

For convenience, here’s a list of the 10 REITs (along with its index weight in brackets below):

  • Ascendas REIT (9.68%)
  • Mapletree Logistics Trust (9.11%)
  • CapitaLand Integrated Commercial Trust (8.25%)
  • Mapletree Industrial Trust (8.07%)
  • Mapletree Commercial Trust (7.70%)
  • Frasers Logistics & Commercial Trust (5.54%)
  • Keppel DC REIT (5.16%)
  • Frasers Centrepoint Trust (3.91%)
  • Keppel REIT (3.57%)
  • Mapletree North Asia Commercial Trust (3.44%)

Out of the 10 REITs above, I’m a unitholder of 8 of them (with my most recent addition being Keppel DC REIT, and you can read about why I’ve made the investment decision here). How many of the 10 REITs do you currently have in your investment portfolio?

For the benefit of those of you are may not be familiar with the REITs above, what I’m going to do in this post is to talk briefly about each of them in terms of their business operations and the properties currently in their portfolio, their financial results and distribution payout over the years, along with the yield you’ll get based on its current unit price (at the time of writing of this post) and a full-year distribution payout from the most recent financial year.

It’s going to be a pretty long post ahead, so let’s buckle up and get started…

1. Ascendas REIT (SGX:A17U)

Ascendas REIT is a blue-chip REIT, with its Sponsor being CapitaLand Investment.

As at the end of the second quarter on 30 June 2021, the REIT’s portfolio consists of a total of 211 properties in 4 geographic locations – 96 in Singapore, 36 in Australia, 49 in the United Kingdom/Europe, and 30 in the United States.

In a total of 10 years I have studied (since FY2011/12 when the REIT’s financial year ended every 31 March till FY2020 when its financial year have been shifted to 31 December), its gross revenue grew from S$503.3m in FY2011/12 to S$1,049.5m in FY2020 – a compound annual growth rate (or CAGR) of 8%. Similarly, its net property income also saw a CAGR of 8% – from $368.3m in FY2011/12 to $538.4m in FY2020.

Currently, the REIT declares a distribution payout on a half-yearly basis (once when they declare their second quarter results, and once when they declare their fourth quarter results), and over the years, its payout have also grown from 13.560 cents/unit in FY2011/12 to 14.688 cents/unit in FY2020.

Based on its current unit price of $3.02, and its distribution payout of 14.688 cents/unit in FY2020, it has a yield of 4.9%.

2. Mapletree Logistics Trust (SGX:M44U)

Mapletree Logistics Trust, as the name implies, is a pure-play logistics REIT. It is also Singapore’s first Asia-focused logistics REIT, and it is also a constituent of Singapore’s benchmark Straits Times Index (or STI.)

As at the end of the first quarter of financial year 2021/22 (the REIT has a financial year end every 31 March), its property portfolio consists of a total of 163 properties in 9 geographical locations – 52 in Singapore, 9 in Hong Kong, 30 in China, 18 in Japan, 18 in South Korea, 12 in Australia, 15 in Malaysia, 7 in Vietnam, and 2 in India.

Its financial performance over the past 10 years have been impressive – particularly, its gross revenue grew at a CAGR of 5%, from $339.5m in FY2011/12 to $561.1m in FY2020/21, with its net property income also recording a CAGR of 5% in the same time period, from $293.6m in FY2011/12 to $499.1m in FY2020/21.

In terms of distribution payout, the REIT declares one on a quarterly basis (so this REIT is definitely one to look at for those of you who prefer to invest in REITs that pays out a distribution to its unitholders on a quarterly basis) – over the last 10 financial years, its distribution payout have increased from 8.24 cents/unit in FY2011/12 to 8.326 cents/unit in FY2020/21.

Based on its current unit price of $1.99, and its full-year distribution payout of 8.326 cents/unit in FY2020/21, it has a yield of 4.2%.

3. CapitaLand Integrated Commercial Trust (SGX:C38U)

The blue-chip REIT was formed as a result of a merger between retail REIT CapitaLand Mall Trust and office REIT CapitaLand Commercial Trust (both of them are constituents of the STI as well) since 21 October 2020.

Post-merger, its property portfolio comprises of retail, office, and integrated development properties located in Singapore as well as in Germany (with 2 properties in Frankfurt.)

Its top- as well as bottom-line growth over the last 9 financial years (the REIT has a financial year ending every 31 December) has been stable – with the former growing at a CAGR of 1% (from $661.6m in FY2012 to $745.2m in FY2020), and the latter recording a CAGR of 2% (from $445.3m in FY2012 to $512.7m in FY2020.)

For those of you who are looking to invest in a REIT that distributes a stable distribution payout, CapitaLand Integrated Commercial Trust certainly did not disappoint – over the last 9 financial years I have looked at, its distribution payout improved from 9.46 cents/unit in FY2012 to 11.97 cents/unit in FY2019, but fell to 8.69 cents/unit in FY2020 (due to the REIT retaining a portion of the distributable income to unitholders for prudence as a result of the Covid-19 pandemic.)

Yield-wise, if you take its payout of 8.69 cents/unit in FY2020, and compute based on its current unit price of $2.13, it is at 4.1%; However, if you were to calculate its yield based on its payout of 11.97 cents/unit in FY2019 (which is before the pandemic), then its yield is at 5.6% – I will focus my attention more on the latter because at this point in time, businesses (especially that in the retail malls) have more or less returned to normalcy (albeit with some safe management measures in place), and its distribution payout for the first half of the financial year 2021 have also resumed.

Finally, one thing you need to note is that the REIT’s distribution payout frequency is once every half-yearly – once when it releases its second quarter results, and once when it releases its fourth quarter results.

4. Mapletree Industrial Trust (SGX:ME8U)

Mapletree Industrial Trust is another blue-chip REIT, with its Sponsor being Mapletree Investments Pte Ltd, where its property portfolio consists of 86 properties in Singapore (which comprises of Hi-Tech Buildings, Business Park Buildings, Flatted Factories, Stack-up/Ramp-up Buildings, and Light Industrial Buildings, all of which are primarily used for industrial purposes), and 57 properties in North America (including 13 data centres held through the joint venture with Mapletree Investments Pte Ltd.)

Over the last 10 financial years (the REIT has a financial year ending every 31 March), its gross revenue have saw y-o-y improvements in every single year (where it grew from $246.4m in FY2011/12 to $447.2m in FY2020/21), with its CAGR at 6%; equally as impressive is its net property income growth, which too have recorded y-o-y improvements every single year over the same time period – from $171.3m in FY2011/12 to $351m in FY2020/21 – a CAGR of 7%.

Just like Mapletree Logistics Trust, Mapletree Industrial Trust also declares a distribution payout to its unitholders on a quarterly basis (another REIT for those of you who prefer a quarterly payout frequency to consider.) What’s impressive about the REIT is that, over the last 10 financial years, its distribution payout declared have improved every single year – from 8.41 cents/unit in FY2011/12 to 12.55 cents/unit in FY2020/21.

Based on its current unit price of $2.75, and a distribution payout of 12.55 cents/unit in FY2020/21, it represents a yield of 4.6%.

5. Mapletree Commercial Trust (SGX:N2IU)

Coming in at 5th place is yet another Mapletree REIT – in Mapletree Commercial Trust. The REIT’s property portfolio comprises of one retail property (in VivoCity, Singapore’s largest retail mall), 2 office properties (in Mapletree Anson, as well as Bank of America Merrill Lynch Harbourfront), and 2 integrated development properties (in Mapletree Business City, which is one of the largest integrated developments in the country, as well as mTower – previously known as PSA Building). Apart from Mapletree Anson, the rest of the REIT’s properties are located in the Greater Southern Waterfront vicinity (which will be key beneficiaries when the Singapore Government’s Greater Southern Waterfront project is up and running – you can read more about it here.)

Similar to the other 2 Mapletree REITs I’ve talked about earlier, Mapletree Commercial Trust is also part of the STI, and has a financial year ending every 31 March.

And speaking of which, its financial performance over the last 10 financial years have been pretty impressive as well – with its gross revenue growing from $201.3m in FY2011/12 to $482.8m in FY2019/20, before dipping by 0.8% to $479.0m in FY2020/21 (due to headwinds from the ongoing Covid-19 pandemic) – despite of that, over a 10 year period, its gross revenue saw a 9% CAGR growth.

In terms of growth in its net property income, it too saw y-o-y improvements every single financial year between FY2011/12 (at $137.4m) and FY2019/20 (at $377.9m), before edging down 0.2% in FY2020/21 (at $377.0m) – with a CAGR of 11% over a 10 year period.

As far as the frequency of its distribution payout to unitholders is concerned, the REIT declares a distribution payout on a semi-annual basis (once when it releases its second quarter results, and once when it releases its fourth quarter results) – over the last 10 years, its payout have improved from 5.3 cents/unit in FY2011/12 to 9.49 cents/unit in FY2020/21.

Finally, based on its current unit price of $2.13, and its payout of 9.49 cents/unit in FY2020/21, its yield is at 4.5%.

6. Frasers Logistics & Commercial Trust (SGX:BUOU)

This enlarged REIT is formed as a result of a merger between Frasers Commercial Trust and Frasers Logistics & Industrial Trust in April 2020.

Post-merger, and at the time of writing, the REIT’s property portfolio consists of a total of 103 logistics and commercial properties located in 5 geographical locations (Australia, Germany, Singapore, the United Kingdom, as well as in the Netherlands.) The REIT has a financial year ending every 30 September.

As the REIT did not release any financial figures for the third quarter (as they have switched to reporting them on a half-yearly basis), I can only refer to that reported in the second quarter ended 31 March 2021 – where its gross revenue and net property income saw huge y-o-y improvements as a result of the inclusion of the properties from Frasers Commercial Trust.

In terms of distribution payouts to unitholder, its declared on a half-yearly basis (once when they release its second quarter financial results, and once when they release its fourth quarter financial results.) Based on its distribution payout of 7.12 cents/unit in FY2019/20, and its current unit price of $1.49, it represents a yield of 4.8%.

7. Keppel DC REIT (SGX:AJBU)

Keppel DC REIT is a pure-play data centre REIT, where its property portfolio comprises of 19 data centres located in 8 geographical locations – 6 in Singapore, 3 in Australia, 1 in Malaysia, 2 in Germany, 2 in Ireland, 1 in Italy, 3 in the Netherlands, and finally, 2 in the United Kingdom (as at the end of the second quarter of FY2021 on 30 June 2021.)

Since its listing back in 12 December 2014, and looking at its full-year post-IPO results between FY2015 and FY2020 (the data centre REIT has a financial year ending every 31 December), its gross revenue saw a CAGR of 17% in a period of 6 years (from $102.5m in FY2015 and $265.6m in FY2020), while its net property income saw an even more impressive CAGR of 19% in the same time period (where it grew from $86.9m in FY2015 to $244.2m in FY2020.)

In terms of distribution payout to unitholders, just like most of the REITs I’ve looked at in this post, the management of Keppel DC REIT also declares a payout to its unitholders on a half-yearly basis – once when it releases its second quarter results, and once when it releases its fourth quarter results; between FY2015 and FY2020, its payout went up from 6.84 cents/unit to 9.17 cents/unit.

Based on its current unit price of $2.39, and its payout of 9.17 cents/unit in FY2020, its yield is 3.8%.

8. Frasers Centrepoint Trust (SGX:J69U)

Frasers Centrepoint Trust is a pure-play retail REIT (except for one office property in Central Plaza which was added to its portfolio following its acquisition of AsiaRetail Fund Limited – you can read the news about it here.) The REIT’s 9 retail properties are all located in heartland locations.

Over a 10-year period (between FY2011/12 and FY2019/20 – the REIT has a financial year ending every 30 September, and it will be releasing its fourth quarter and full-year results on 27 October 2021), its gross revenue and net property income growth have remained stable – with both of them seeing a CAGR of 1% – the former improved from $147.2m in FY2011/12 to $164.4m in FY2019/20, and the latter went up from $104.4m in FY2011/12 to $110.9m in FY2019/20.

In term of its distribution payout, the retail REIT have also changed to paying out its unitholders on a semi-annual basis since it has changed to reporting its financial results in the same time frequency. That said, over a period of 10 financial years, its distribution payout have improved from 10.01 cents/unit in FY2011/12 to 12.07 cents/unit in FY2018/19, but dipped slightly to 9.174 cents/unit in FY2019/20, due to the REIT retaining part of the distribution income during the financial year to cope with the headwinds posed by the Covid-19 pandemic.

If you were to calculate its yield based on a payout of 9.174 cents/unit in FY2019/20, and its current unit price of $2.34, it is at 3.9%; however, if you were to calculate its yield based on the payout of 12.07 cents/unit in FY2018/19 (which is before the pandemic), then the yield will be at 5.2% – Personally, I will go for the latter, because at the time of writing, most of the tenants (in the heartland malls under Frasers Centrepoint Trust) have resumed their normal business activities, and as such, I will expect the distribution payout to be restored to pre-pandemic levels ahead (barring another major wave of outbreak and disruption to the retail businesses.)

9. Keppel REIT (SGX:K71U)

This is a pure-play office REIT, where currently, its property portfolio comprises of 10 offices in Singapore (4 in total), Australia (2 in Sydney, 2 in Melbourne, and 1 in Perth), and South Korea (1 in Seoul.)

Over a 9-year period (between FY2012 and FY2020), its gross revenue climbed from $156.9m in FY2012 to $170.2m in FY2020 – a CAGR of 1%, while its net property income too saw a stable CAGR growth of 1% as well – from $124.7m in FY2012 to $135.5m in FY2020.

In terms of its distribution payouts, this is another REIT that pays out its unitholders on a quarterly basis – however, its distribution payout have fluctuated over the years, as follows:

  • FY2012 – 7.77 cents/unit
  • FY2013 – 7.88 cents/unit
  • FY2014 – 7.23 cents/unit
  • FY2015 – 6.80 cents/unit
  • FY2016 – 6.37 cents/unit
  • FY2017 – 5.70 cents/unit
  • FY2018 – 5.56 cents/unit
  • FY2019 – 5.58 cents/unit
  • FY2020 – 5.73 cents/unit

If you were to compute the yield of the REIT based on its full-year payout in FY2020 (i.e. 5.73 cents/unit) against its current unit price of $1.08, then the yield will be 5.3%.

10. Mapletree North Asia Commercial Trust (SGX:RW0U)

Finally, the 10th REIT (hope you’re still with me so far…) is another Mapletree REIT – in Mapletree North Asia Commercial Trust – 2 things you may be interested in about this REIT – first, this is the only Mapletree REIT that’s not part of the STI; second, all its properties are located outside of Singapore – 1 in Hong Kong (in Festival Walk), 2 in China (in Gateway Plaza and Sandhill Plaza – both of them office properties), 9 office properties in Japan, and 1 office properties in South Korea – all of them are office buildings except for Festival Walk (where it has a retail component.)

As the REIT was only listed in March 2013, I have studied its full-year financial results from FY2013/14 (the REIT has a financial year ending every 31 March) to FY2020/21 – over a period of 8 financial years, its gross revenue grew at a CAGR of 5%, with improvements recorded every single year, except for in FY2019/20 (due to the disruption in Festival Walk as a result of anti-government protests in Hong Kong) – from $267.6m in FY2013/14 to $391.4m in FY2020/21; its net property income grew at a similar CAGR at 4% over the same time period – from $168.2m in FY2013/14 to $292.0m in FY2020/21, with improvements recorded every single year except for in FY2019/20 for the same reason.

Looking at its distribution payouts, the REIT also pays out its unitholders on a half-yearly basis – once when it reports its second quarter results, and once when it reports its fourth quarter results – with its payout climbing from 6.28 cents/unit in FY2013/14 to 7.69 cents/unit in FY2018/19, before going down to 7.124 cents/unit in FY2019/20 (due to a disruption of income from Festival Walk), and then down to 6.175 cents/unit in FY2020/21 (due to disruptions caused by the Covid-19 pandemic.)

If you take its current unit price of $1.01, and a distribution payout of 6.175 cents/unit in FY2020/21, the yield would be 6.1%.

In Summary

Thank you for following me all the way till this point. I really hope you’ve found the contents above useful so far.

For those of you who are looking to invest in REITs that pays out a distribution on a quarterly basis, Mapletree Logistics Trust, Mapletree Industrial Trust, and Keppel REITs are the 3 (from the list of 10 REITs above) you can consider.

Also, in terms of yields, at their current traded prices (at the time of writing of this post), a huge majority of them are above 4.0% – meaning that if you invest in most of REITs at their current traded prices I’ve noted down above, your returns will be better compared to if you put your money in the CPF Special Account. On top of that, I’ve not considered the potential capital gains you will enjoy years down the road should they record further improvements in their financial results and distribution payouts.

That said, however, apart from its distribution payouts and its financial performance, there are also other things you need to look at before you make any investment decisions, some of them include the REIT’s debt and portfolio profile over the years (I did not include them in this post, as its already quite lengthy as it is right now, and I do not want to bore you with too much statistics – but some of the things you need to look out for in terms of its debt profile is that the REIT should preferably not have an increasing aggregate leverage over the years, or one that’s dangerously close to the regulatory 50.0%, as it means that its potential to make further yield-accretive acquisitions is also very much reduced; as for portfolio occupancy, one thing to you need to take note is that the REIT’s portfolio occupancy over the years should at least be maintained at a consistently high percentage – at least over 90.0% in my opinion.)

Finally, you may be wondering which are the 2 that’s not in my long-term investment portfolio – they are Frasers Logistics & Industrial Trust (because I personally find the performance of office properties from Frasers Commercial Trust a laggard to the REIT’s growth; but I may consider investing in it if the REIT can continue to display positive sets of results over the next 1-2 financial years), and Keppel REIT (due to the irregularity of its distribution payouts over the years.)

However, despite having said that, please take note that everything you have just read above is purely for educational purposes only, and that all the opinion are solely mine. They definitely do not represent any buy or sell calls for any of the 10 REITs above. Please do your own due diligence before you make any investment decisions.

Disclaimer: At the time of writing, I am a unitholder of Ascendas REIT, Mapletree Logistics Trust, CapitaLand Integrated Commercial Trust, Mapletree Industrial Trust, Mapletree Commercial Trust, Keppel DC REIT, Frasers Centrepoint Trust, and Mapletree North Asia Commercial Trust.

Catch Me "Live" at the REITs Symposium 2024 - the Largest REIT Event in Singapore!

REITs Symposium - The Largest Real Estate Investment Trust Event in Singapore - 11 May 2024 | Suntec Convention Centre Level 3, Summit 1 & 2 | 9.00am - 5.00pm

I am absolutely honoured to be invited to contribute to not just 1, but 2 segments in this year's REITs Symposium (held on Saturday, 11 May 2024 at Suntec Convention Centre Level 3, Summit 1 & 2 between 9am and 5pm), with the schedule as follows:

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Many thanks for your support and advance, and I hope to see you at the event! :)

 

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