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2 REITS That Have Delivered Positive Performances Recently

REIT investors are often looking for a steady stream of distribution income.

That might be what a REIT investors wants, but there is no guarantee that REITs will always deliver the goods. In this article, we will look at two REITs that have kept up with a REIT investor’s expectations of a stable, or increasing distribution.

1. First Real Estate Investment Trust (SGX: AW9U) is the first REIT on our list that has delivered commendable performance.

As a quick introduction, First REIT is a healthcare-focused real estate investment trust. It currently has a portfolio of 18 properties (14 in Indonesia, three in Singapore, and one in South Korea) that are mostly healthcare-related facilities. The REIT’s sponsor is Indonesia’s largest listed property company, PT Lippo Karawaci Tbk.

For the latest quarter, gross revenue increased 3.3% while net property income (NPI) improved 3.2% compared to the same period last year. With that, the distribution per unit (DPU) came in higher at 2.14 cents as compared to 2.11 cents in the same period last year. The performance was driven by the contribution from Siloam Hospitals Labuan Bajo.

Mr Victor Tan, asset manager of First REIT, added:

“The Trust has recently completed the acquisition of an integrated property comprising a hospital and retail mall in Bau Bau city on Buton Island, Indonesia. Continuing on the tracks of yield-accretive acquisitions, we have also announced our proposed joint venture with Lippo Malls Indonesia Retail Trust to jointly acquire another integrated development in Yogyakarta. With the Buton Property, and potentially another new-quality asset, Unitholders can look forward to a steady income stream that will continue to deliver consistently growing DPU.”

For more information about the latest quarterly summary, you can head here.

2. Another REIT that posted positive results is Dasin Retail Trust (SGX: CEDU).

As a quick introduction, Dasin Retail Trust was listed in January 2017. The REIT is a China retail property trust providing exposure to the Pearl River Delta region. Dasin Retail Trust’s portfolio comprises four retail malls located in Zhongshan City, Guangdong provice, China.

The REIT posted revenue that was 21% ahead of its initial public offering (IPO) projections, and net property income (NPI) that was 25% above its forecast. Dasin Retail REIT benefited from its Shiqi Metro Mall acquisition, which was completed earlier than expected.

Mr. Li Wen, CEO of the Trustee-Manager provided a good summary of the latest quarterly result.

“Excluding the impact from the straight-lining of rental income, net property income for the nine months ended 30 September 2017 was 9% higher than Forecast, attributable to the acquisition of Shiqi Metro Mall earlier than forecasted as well as better operational metrics.

The Trust maintained a strong 100% portfolio occupancy as at 30 September 2017. This is a testament to our proactive asset management and leasing capability.

On capital management, gearing remain healthy at 31.5%. We will continue on enhance our portfolio to provide stable and growing distributions for our unitholders.”

Going forward, the REIT expects the high GDP growth in Zhongshan (7.5% year-on-year for the first nine months of the year), and plans to develop the Guangdong-Hong Kong-Macau Greater Bay Area to benefit the trust.

Investors might want to take note on the assumptions behind Dasin Retail REIT’s yield.

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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.