Latest Earning Result – Three REITs That Have Delivered Better Performances

The property industry in Singapore is currently facing headwinds due to a weaker economy.

As a result, most property related investments, especially REITS, have shown obvious signs of weaknesses in their latest results.

Nevertheless, there are a few REITs that manage to buck the trend and deliver stronger results. Here are three of them.

CDL Hospitality Trusts (SGX: J85) is a stapled trust that consists of a real estate investment trust and business trust. It has a focus on hospitality assets and currently owns a total of 15 hotels, two resorts, and a retail mall.

These properties have 4,911 rooms in total and are spread over Singapore, Australia, Japan, New Zealand, the United Kingdom (UK) and the Maldives.

Vincent Yeo, the chief executive of CDL Hospitality Trust said: “Overall, our geographically diversified portfolio has provided the benefits of income diversification despite the soft trading conditions in our core Singapore market.

Our performance in third quarter was lifted up by inorganic contribution from Hilton Cambridge City Centre as well as improved performance from Grand Millennium Auckland.”

Gross revenue increased 10.5%, while net property income (NPI) improved 5.3% year on year. The distribution per unit (DPU) came in higher by 3.4%. For more information about the latest quarterly summary, please click here.

Mapletree Commercial Trust (SGX: N2IU) is the owner of Singapore’s largest mall, VivoCity, together with the PSA building, Bank of America Merrill Lynch HarbourFront (MLHF), Mapletree Anson, and Mapletree Business City.

The overall portfolio occupancy improved to 98.8%, on the back of improvements at PSA building and Mapletree Anson.  A year ago, the REIT’s portfolio occupancy was 96.6%.

Mapletree Commercial Trust also reported a weighted average lease term to expiry (WALE) of about 2.8 years, which is an improvement from 2.3 years in the same quarter a year ago. Shopper traffic at VivoCity was up 7.0% year-on year during the reporting quarter. Tenant sales rose by 2.7% for the same period.

For more information on the latest quarterly result, please click here.

In term of numbers, gross revenue was up by 23.6%, while net property income (NPI) improved 24.8% compared to the same quarter last year. Distribution per unit (DPU) for the reporting quarter followed suit, climbing 1.5% year-on-year.

Mapletree Industrial Trust (SGX: ME8U) is the another REIT that has turned in a good performance. The REIT focusses on the industrial property sector and currently has 85 properties in its portfolio (all located in Singapore) that are valued at $3.6 billion, as of 31 March 2016.

The company said: “MIT’s [Mapletree Industrial Trust] 2QFY16/17 DPU year-on-year increase of 1.4% was underpinned by higher rental rates secured across all property segments and higher occupancy achieved at Hi-Tech Buildings.

The timely completion of Phase One of the BTS development for Hewlett-Packard marks another milestone in our strategy to grow the Hi-Tech Buildings segment. Its revenue contribution as MIT’s largest tenant will help to mitigate the negative impact of the weak Singapore industrial market on the portfolio.”

The business environment is expected to remain challenging in view of the uncertain macroeconomic environment and large impending supply of industrial space in Singapore. This is likely to exert pressure on occupancy and rental rates.”

Gross revenue increased 1.8%, while net property income (NPI) improved 4.3% year on year. The distribution per unit (DPU) came in higher by 1.4%.

For more information on the latest quarterly results, please click here. Mapletree Industrial Trust ended the reporting quarter with an overall portfolio occupancy of 92.5%, down from the 93.5% in the previous quarter.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.


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.