The 5 Highest Yields in Singapore’s REIT Universe (And 1 Quick Investing Lesson)

The SGX S-REIT Index is a good place to start exploring real estate investment trusts (REITs) in Singapore’s stock market.

In total, the index comprises 28 REITs, six stapled trusts, and three property trusts. Naturally, the trusts will have different distribution yields. A recent report by Singapore Exchange provided some insights into the SGX S-REIT Index and its constituents. Here are the five trusts within the index that have the highest yields (figures as of 9 May 2017, unless otherwise stated):

1. On top of the heap is Sabana Shari’ah Compliant REIT (SGX: M1GU) with a yield of 10.2%. It may have the highest yield, but it also has the poorest return – the REIT has recorded a negative total return of 37.2% over the last three years and is facing persistent questions from investors over its poor business performance. Sabana Shariah Compliant REIT, which invests in industrial properties in Singapore, has a market cap of $479 million.

2. Viva Industrial Trust (SGX: T8B) is in second place with a yield of 9.1%. The stapled trust, which also focuses on Singapore’s industrial real estate sector, has a market cap of $762 million. Viva Industrial Trust has recorded a three-year total return of 34.5%.

3. Another industrial REIT, Soilbuild Business Space REIT (SGX: SV3U), weighs in at third place with a yield 8.9%. The REIT has a total return of 13.4% over the last three years and has a market cap of $713 million.

4. RHT Health Trust (SGX: RF1U), which has a market cap of $786 million, stands shoulder-to-shoulder with Soilbuild Business Space REIT with a yield of 8.9%. The business trust owns healthcare-related assets in India and has delivered a total return of 88.3% over the last three years.

5. Lippo Malls Indonesia Retail Trust  (SGX: D5IU) rounds off the list with a yield of 8.2%. The owner of shopping malls in Indonesia recorded a total return of 34.7% over the last three years and has a market cap of $1.2 billion.

Sabana Shari’ah Compliant REIT has the highest distribution yield within the SGX S-REIT Index, but its total return has been disappointing over the last three years. As investors, we should never blindly assume that a REIT’s current distribution will persist in the future.

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