2 REITS That Have Delivered Mixed Performances Recently

The earnings season is about to come to a close.

As is common with every earnings season, there will be some real estate investment trusts (REITs) posting growth, some posting mixed numbers while others experience declines. So, which are the REITs that have reported mixed numbers recently? Let’s look at two of them.

IREIT Global (SGX: UD1U) is the first on the list that has delivered a mixed performance.

As a quick introduction, IREIT Global has five freehold properties in Germany. These properties are located in the key German cities of Berlin, Bonn, Darmstadt, Münster and Munich.

Quarterly gross revenue and net property income (NPI) were up by 1.3% and 0.3%, respectively, year-on-year. Yet, distribution per unit (DPU) was down by 7.6% year-on-year to 1.46 cents. Gearing stood at 40.3%, as at 31 December 2017, with interest coverage of 8.5 times. The portfolio occupancy rate was 98.30% at the end of 2017.

Aymeric Thibord, the chief executive of the REIT’s manager, commented:

“IREIT has delivered a steady set of results in FY 2017. In the year ahead, its portfolio performance should continue to be supported by its blue-chip tenant base and long leases, with notably no lease expiry in 2018.

Looking ahead, we will continue to pursue our growth strategy based on the four pillars of seeking diversification, adopting a long-term approach, achieving scale, and leveraging on Tikehau Capital’s established local presence.”

The next REIT on the list is Lippo Malls Indonesia Retail Trust (SGX: D5IU), or Lippo Malls.

As a quick introduction, Lippo Malls is the first and only Indonesian retail real estate investment trust listed in Singapore.

Gross revenue for the fourth quarter grew 1.2% to S$49.3 million while NPI improved by 0.8% to S$44.9 million as compared to the same period last year. However, the REIT’s DPU declined by 9.2% (in Singapore dollar terms) to 0.79 Singapore cents. The gearing and occupancy rates stood at 33.7% and 93.7%, respectively, as at 31 December 2017.

Chan Lie Leng, the chief executive of the REIT’s manager, said:

“Our Q4 result was certainly impacted by cost relating to the change in trustee, reduced income from the retail spaces and narrower gains from our hedges due to a weakened Rupiah for that quarter.

Notwithstanding this, we are still able to report a steady 0.9% increase in our full year DPU to 3.44 Singapore cents, and adjusted full year DPU would have been 3.49 Singapore cents, a gain of 2.3% if the change of trustee cost was not incurred.”

We believe we’ve identified a dividend dynamo whose financials are strong enough to qualify its dividend as “safe” – and have profiled this stock in a research report that’s now available to download completely free of charge. Simply click here to claim your copy today!

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.