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2 REITS That Are Trading At More Than 7% Yield!

“Given the low interest rate and low dividend yield in most blue chips company, where else can I search for investment ideas that pay a reasonably high income?”

For many investors who wants to invest in investments that are relatively low risk with reasonable yield, they may be facing the above situation.

For this group of investors, here is one suggestion – REITs.

But there are quite a number of REITs available in Singapore. So where should we start?

Personally, I will just go through the lists of REITs with high yield, and choose a few that are worth exploring further.

With that in mind, let’s look at 2 of the REITs that are trading at high yield of more than 7%. Here is a short summary of each of its properties profile.

  Mkt. Cap.in Price to book Distribution
REIT S$ million ratio Yield
CapitaRetail China Trust (SGX: AU8U) 1,209 0.88 7.63%
Mapletree Greater China Commercial Trust (SGX: RW0U) 2,710 0.82 7.57%

  Source from Stock Facts SGX

CapitaRetail China Trust (CRCT)

CRCT is a Singapore-based real estate investment trust (“REIT”) established with the objective of investing, on a long-term basis, in a diversified portfolio of income-producing retail real estate in China. As at 31 December 2015, the trust’s properties are valued at RMB 10.91 billion.

The geographically-diversified portfolio of shopping malls is located in seven of China’s cities.

Example of the properties under management are CapitaMall Xizhimen, CapitaMall Wangjing, CapitaMall Grand Canyon, CapitaMall Anzhen and CapitaMall Shuangjing in Beijing; Galleria in Chengdu, Sichuan Province and others.

As of 30th September 2016, the trust’s occupancy rate was 95.2%.

Mapletree Greater China Commercial Trust (MGCCT)

MGCCT is a Singapore real estate investment trust (“REIT”) which aims to invest real estates in the Greater China region which are used primarily for commercial purposes (including real estate used predominantly for retail and/or offices).

It is the first and only REIT that offers investors the opportunity to invest in commercial properties situated in prime locations in both Hong Kong and Mainland China.

MGCCT’s Portfolio comprises three commercial properties located in Hong Kong, Beijing and Shanghai, namely Festival Walk in Hong Kong, Gateway Plaza in the Lufthansa Area in Beijing and Sandhill Plaza in Zhangjiang Hi-Tech Park, Pudong New Area, Shanghai.

As of 30th September 2016, the trust’s occupancy rate is at 95.7%.

Conclusion:

Though the above REITs are trading at rather high distribution yields, it is important that investors do their homework to understand the sustainability of their payouts.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.