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These 2 REITS Have Delivered Strong Performances Recently

In a low-interest environment, REITs are a particularly attractive investment due to their relatively predictable earnings power. In this article, I will look at two REITs that have lived up to their investors’ expectations by delivering positive performance in their latest earnings.

Mapletree Logistics Trust (SGX: M44U), or MLT, is one of those REITs that has delivered commendable results recently.

As a quick introduction, MLT owns 124 logistics properties around Asia-Pacific region that includes Singapore, Hong Kong, Japan, South Korea, Australia and others.

In the fourth quarter, revenue grew 11% year-on-year to S$107.5 million while net property income increased 14% to S$91.3 million. Distribution per unit (DPU) was up by 4.1% as compared to the same period last year. The 4.1% year-on-year growth was achieved despite an increase in shares from 2.5 billion a year ago to around 3.1 billion in the latest period.

The stronger performance was mainly driven by growth from the existing portfolio, initial contribution from a newly-completed redevelopment in Singapore, as well as contributions from acquisitions.

Ng Kiat, the chief executive of MLT’s manager, made the following comments:

“We are pleased to report a 4% year-on-year growth in MLT’s 4Q DPU to 1.937 cents, ahead of the forecast DPU of 1.919 cents provided in the circular dated 28 August 2017. FY17/18 was a busy year in which we strengthened the competitive edge of our portfolio with the addition of two new quality assets with modern specifications – Mapletree Logistics Hub Tsing Yi in Hong Kong and Mapletree Pioneer Logistics Hub in Singapore. We expect to build on this momentum to continually improve our portfolio through strategic acquisitions and redevelopments. At the same time, we will continue with active asset and lease management to maintain high occupancy and optimise returns.”

Based on the full year DPU of 7.618 Singapore cents and closing price of S$1.25 on 14 May 2018, the REIT has a trailing distribution yield of 6.1%.

The next REIT that has performed well is Mapletree Greater China Commercial Trust (SGX: RW0U), or MGCCT.

As a quick introduction, MGCCT has properties in China and Hong Kong. It currently has three properties in its portfolio namely, Festival Walk, Gateway Plaza, and Sandhill Plaza.

For the financial year ended 31 March 2018, gross revenue increased 1.3% to S$355.0 million whilst net property income was up by 0.5% to S$287.2 million. DPU came in at 7.481 cents, 1.9% higher than the same period last year.

The improvement in performance was driven by higher revenue growth from Festival Walk and Gateway Plaza as a result of higher rental rate.

Cindy Chow, the chief executive MGCCT’s manager, said:

“MGCCT has reported a positive set of results for FY17/18. Through our proactive portfolio management efforts, the portfolio remains resilient with a high portfolio occupancy rate of 98.5%, as well as a healthy average rental reversion for each asset.”

Based on MGCCT’s full-year DPU of 7.481 and its closing unit price of S$1.16 on 14 May 2018, the REIT has a trailing distribution yield of 6.4%.

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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.