As income investors, we want to invest in companies that can continually grow their dividends over time. This is especially true for those who are counting on those dividends to finance their lifestyle — for example, retirees.
Some of the main investment vehicles that appeal to income investors are real estate investment trusts (REITs) because they generally have stable income profiles. Also, REITs have high profit payout ratios (at least 90% of net profit).
Let’s look at two REITs that not only sustained but raised their dividends this quarter.
First on the list is Mapletree Logistics Trust (SGX: M44U), or MLT, which is a real estate investment trust (REIT) that owns 141 logistics properties around the Asia-Pacific region, including in Singapore, Hong Kong, Japan, China, South Korea, Australia, and others.
In the latest quarter ended 31 March 2019, MLT grew its distribution per unit (DPU) by 4.5% year on year to 2.024 Singapore cents. The increase in DPU was achieved despite an increase in shares from 3.1 billion last year to 3.6 billion this year.
The improvement in DPU was well supported by the stronger underlying performance of MLT’s business. In fact, MLT reported that gross revenue grew 13.0% to S$121.4 million, while net property income jumped 15.0% to S$105.0 million, as compared to the same period last year.
Based on MLT’s full-year DPU of 7.941 Singapore cents and its closing unit price of S$1.46 (as of writing), the REIT has a trailing distribution yield of 5.4%.
The other REIT that has grown its DPU recently is CapitaLand Mall Trust (SGX: C38U), which currently has 15 properties located in the suburban areas and downtown core of Singapore, including Tampines Mall, Junction 8, Funan, IMM Building, Plaza Singapura, Bugis Junction, and others.
In the latest quarter ended 31 March 2019, CMT grew its DPU by 3.6% year on year to 2.88 Singapore cents. Similar to MLT, CMT’s higher DPU was well supported by stronger business performance. Let’s look at some numbers for the quarter:
Gross revenue was up 10.0% year on year to S$192.7 million. Similarly, net property income grew 11.5% year on year to S$140.1 million. The year-on-year improvements in gross revenue and NPI (net property income) were due to acquisitions as well as higher rental income from certain properties.
Based on CMT’s annualised DPU of 11.68 Singapore cents and its closing unit price of S$2.41 (as of writing), the REIT has a trailing distribution yield of 4.8%.
Stop worrying about the uncertain REITs market with our new Complete Guide To Buying The Best Singapore REITs. We give you 3 quick ways to easily value your REITs so you save tons of research time. Value your REITs today so you know exactly when to buy, sell or hold. Simply enter your email here and we will rush the 42-page PDF immediately to your inbox...for FREE!
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 Mapletree Logistic Trust and Capitaland Mall Trust.