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Singapore’s Billion Dollar REITs with the Best Yields

The Singapore stock market boasts of 20 real estate investment trusts (REIT) with market capitalisations of over S$1 billion.

Each of those REITs have something unique to offer. A recent report provides some insights to the distribution yields and the performances of these billion-dollar REITs. Here’re some highlights from the report (figures as of 13 May 2016, unless otherwise stated):

  1. The SPDR STI ETF (SGX: ES3), an exchange traded fund that mimics the fundamentals of the Straits Times Index (SGX: ^STI), may serve as a good benchmark for comparison for the individual REITs. As of 24 May 2016, the SPDR STI ETF has a dividend yield of 3.6%.
  2. CapitaLand Mall Trust (SGX: C38U) is the largest REIT in the list and is also a component of the Straits Times Index. The mall owner offered a 5.3% yield. CapitaLand Mall Trust also managed to increase its distribution per unit (DPU) from 9.36 cents in 2010 to 11.43 cents in 2015. Total returns over the past five years for the REIT was almost 38%.
  3. Ascendas Real Estate Investment Trust (SGX: A17U) and CapitaLand Commercial Trust (SGX: C61U), another two components of the Straits Times Index, are also on the billion-dollar list. CapitaLand Commercial Trust offered a dividend yield of 6.2%, higher than CapitaLand Mall Trust. However, in a recent quarterly report, CapitaLand Commercial Trust also cautioned about the “new above-normal office supply” in 2016 which may put pressure on rental yields for offices; CapitaLand Commercial Trust’s portfolio is made up mainly of offices in Singapore.
  4. In the list of billion-dollar REITs, the trio of Mapletree Commercial Trust  (SGX: N21U)Mapletree Industrial Trust (SGX: ME8U), and Frasers Commercial Trust (SGX: ND8U) stand out. All three REITs recorded total returns of over 100% in the past five years.
  5. Not all REITs had turned out to be good investments over the past five years. CDL Hospitality Trust (SGX: J85) is one REIT which had delivered negative total returns in the past five years.

The best yields may not come from a high distribution yield alone. Each REIT comes with a different risk profile. As Foolish investors, we might want to put our thinking hats on to find the REITs with distributions which are sustainable and if possible, have the ability to grow over the long term.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.