REITs have always been a favourite investment choice for risk-averse investors because of their stable earnings quality. Moreover, the better ones can consistently grow their earnings, as well as distribution per unit (DPU), over time.
Let’s take a look at three REITs that have grown their DPU in 2018.
REIT No. 1
We’ll start with CapitaLand Mall Trust (SGX: C38U), or CMT, a REIT with 15 properties located in the suburban areas and the downtown core of Singapore, including Tampines Mall, Junction 8, Funan, IMM Building, Plaza Singapura, Bugis Junction, and others.
For the year ended 31 December 2018, CMT grew its DPU by 3.0% year on year to 11.5 Singapore cents. The higher DPU came as a result of higher net property income. For 2018, CMT reported that gross revenue was up 2.2% year on year to S$697.5 million. Similarly, net property income grew 3.2% year on year to S$125.7 million. The year-on-year improvement in gross revenue and NPI (net property income) was due to acquisitions as well as higher rental income from certain properties.
At its current price of S$2.39, CMT has a distribution yield of 4.8%.
REIT No. 2
Next up is Keppel DC REIT (SGX: AJBU), a real estate investment trust involved in data centres. Listed in December 2014, the REIT manages 15 data centres in Asia and Europe.
For the year ended 31 December 2018, Keppel DC REIT grew its DPU by 5.0% year on year to 7.32 Singapore cents. The higher DPU came as a result of stronger performance in the REIT’s underlying business. For 2018, Keppel DC REIT reported that gross revenue grew 26.2% year on year to S$175.5 million, while net property income (NPI) improved by 26.0% during the period to S$157.7 million.
At its current price of S$1.44, Keppel DC REIT has a distribution yield of 5.1%.
REIT No. 3
CapitaLand Commercial Trust (SGX: C61U), or CCT, is the largest commercial real estate investment trust (REIT) in Singapore by market capitalization, and it’s managed by CapitaLand Limited (SGX: C31). The REIT has ownership over nine commercial properties in Singapore and one property in Germany.
For the year ended 31 December 2018, CCT grew its DPU by 0.5% year on year to 8.70 Singapore cents. The higher DPU came as a result of growth through new acquisitions. In 2018, gross revenue grew 16.7% year on year to S$394.0 million, while net property income (NPI) improved by 18.5% during the period to S$314.6 million.
At its current price of S$1.95, CCT has a distribution yield of 4.5%.
There you go, three REITs that grew their DPU in 2018. Stay tuned for more tomorrow.
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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. The Motley Fool Singapore recommends Capitaland Mall Trust.