Real estate investment trusts (REITs) have a strong reputation and track record as steady, dependable income investments. However, some REITs have also witnessed steady and sustained capital appreciation over time, as the REIT managers have added value to unit-holders through organic growth strategies such as asset enhancement initiatives (AEI) and positive rental reversions. Yet others have embarked on successful acquisitions, which help to bolster the asset base of the REIT and deliver increased distribution per unit (DPU) to investors.
An SGX report has highlighted five REITs that have delivered double-digit total returns year to date. Total return comprises returns from dividends received as well as capital appreciation from a rise in the share price. Interestingly, three out of the five REITs are managed by Mapletree Investments Pte Ltd.
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1. Fortune REIT
Fortune REIT (SGX: F25U) is Asia’s first cross-border REIT and holds a portfolio of 16 private housing real estate properties in Hong Kong, comprising 3 million square feet of retail space and 2,713 car park spaces. The total return for Fortune REIT was 25.1% year to date, and the REIT reported higher revenue and net property income (NPI) for its year ended 31 December 2018 (FY 2018). DPU increased by 1% year on year to 51.28 HK cents per share. At Fortune REIT’s last traded share price of HK$10.30, this represents a trailing dividend yield of 5.0%.
2. Mapletree Logistics Trust
Mapletree Logistics Trust (SGX: M44U), or MLT, is an Asia-focused logistics REIT that invests in a diversified portfolio of income-producing logistics real estate assets. As of 31 March 2019, MLT had a portfolio of 141 logistics assets in Singapore, Hong Kong, Japan, China, South Korea, Malaysia, and Vietnam.
MLT’s total return year to date stands at 19.2%. For its latest FY 2019 earnings, the REIT reported a 16.7% year-on-year increase in NPI and a year-on-year increase of 4.2% to 7.941 Singapore cents per unit. At MLT’s last traded share price of S$1.49, the trailing dividend yield is 5.3%.
3. Mapletree Commercial Trust
Mapletree Commercial Trust (SGX: N21U), or MCT, is a Singapore-focused REIT that invests in a diversified portfolio of income-producing real estate used primarily for office and/or retail purposes. MCT has a portfolio of five assets with a total net lettable area of 3.9 million square feet with an appraised value of S$7 billion.
MCT provided investors with a total return of 18.7% year to date. For FY 2019, gross revenue inched up 2.4% year on year, while NPI was up 2.6% year on year. DPU hit an all-time high of 9.14 Singapore cents, and at the last traded price of S$1.94, this represented a trailing dividend yield of 4.7%.
4. Mapletree North Asia Commercial Trust
Mapletree North Asia Commercial Trust (SGX: RW0U), or MNACT, is a REIT that invests in best-in-class commercial properties situated in China, Hong Kong, and Japan. MNACT owns a portfolio of nine properties with lettable area of approximately 4.2 million square feet, with a book value of S$7.6 billion as of 31 March 2019.
The total return for MNACT was 18.4% year to date. For FY 2019, the REIT reported a strong set of earnings, with revenue rising 16.2% year on year and NPI rising 15.3% year on year. DPU for the year was up 2.8% year on year to 7.69 Singapore cents, providing investors with a trailing dividend yield of 5.9% at the last traded price of S$1.31.
5. Ascendas REIT
Ascendas REIT (SGX: A17U), or A-REIT, is Singapore’s first and largest listed industrial REIT. The REIT had a portfolio comprising 98 properties in Singapore, 35 properties in Australia, and 38 properties in the UK, valued at around S$11.1 billion as of 31 March 2019.
The REIT’s total return year to date was 17.1%. For FY 2019, NPI was up 3.2%, while DPU for the fiscal year crept up 0.3% year on year to 16.035 Singapore cents. At the last traded price of S$2.90, the trailing dividend yield for the REIT was 5.5%.
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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 Royston Yang does not own shares in any of the companies mentioned. The Motley Fool Singapore has recommended shares of Mapletree Logistics Trust, Mapletree Commercial Trust, and Ascendas REIT.